India tech jobs decline: AI, US immigration impact recruitment

India’s technology job market is facing its weakest phase in more than two years, as global uncertainty, changing US immigration dynamics and the rapid adoption of artificial intelligence push employers towards a cautious stance on recruitment.

Active tech job openings have fallen to the lowest in 28 months at 93,000 in June, marking a 14% month-on-month and 17% year-on-year decline, according to the Active Tech Jobs Outlook report from specialist staffing firm Xpheno.

Industry experts say the downturn reflects more than a cyclical pause. Traditional IT services and routine engineering roles are coming under pressure as companies embrace AI-led productivity gains and shift towards an outcome-based delivery model from billing based on the number of people working on a project.

“There’s a structural reset underway…revenue growth is getting decoupled from headcount growth,” said Nitin Bhatt, technology sector leader at EY India. This shift, he said, is likely to become more pronounced over the coming quarters.

“Clients are pushing hard on pricing, services are becoming more platform-driven, and companies are responding by rethinking their operating models. AI is enabling leading players to deliver impact with much leaner teams,” said Bhatt. “At the same time, there’s a strong push on rationalising the workforce, as companies are finding that despite strong intent, not every employee can be re-trained for an AI-driven future.”

Developments in the US have further affected demand for active talent in June. The Indian tech sector’s talent demand remains hyper-elastic to market uncertainties impacted by geopolitical and geo-economic events. The current low outlook for June is one such low point in a slide down driven by looming uncertainties around the H-1B programme, said Xpheno cofounder Kamal Karanth.

“The H-1B programme is a key enabler for the tech sector’s market access, project delivery and client servicing. The fast-changing dynamics around H-1B and its future uncertainty have hit hiring plans, and enterprises are pulling jobs out from the market,” he added.

Growth in revenue is increasingly being disassociated from growth in employee numbers, indicating a sharp shift away from the industry’s longstanding dependence on large-scale recruitment.

“Today, AI-driven productivity gains are allowing companies to take on more work without a proportional increase in hiring,” said Bhatt. “Not surprisingly, metrics like revenue per employee are becoming increasingly important. In fact, across leading firms, revenue per employee grew by nearly 5% in FY26 despite relatively modest top-line growth.”

The Xpheno data show that the slowdown is spread across segments. Job openings fell month-on-month in June across all tech cohorts – including IT services, global capability centres (tech), funded tech startups and software product companies. GCCs were the only cohort where job openings grew year-on-year at 31%.

An analysis of more than 30,000 tech and digital roles by TeamLease Digital indicated not just a slowdown in technology demand, but a shift in the kind of talent companies want to hire, CEO Neeti Sharma told ET.

Demand for IT support, legacy technologies, and routine coding roles has softened as AI takes over repetitive tasks, said Sharma. Companies are moving away from volume hiring and becoming far more focused on specialised skills and business outcomes.

“But it is very different for emerging skills. Demand for AI, GenAI, data, cloud, cybersecurity and product engineering talent remains strong, and the industry continues to face a significant shortage of qualified professionals in these areas,” said Sharma. “GCCs continue to be the largest hiring engines.”

Mid-senior openings at 46,000 account for 49% of all active openings in June 2026 and have registered a 12% drop in volume compared with the previous month, found the Xpheno report. Opportunities for entry-level tech talent up to two years of experience have further dropped to 10,000 active volume, compared with 13,000 in May 2026. On a YoY basis, entry-level openings show a 44% drop.