The AI talent tilt: Is automation locking out India's fresh engineers?

There will be a growing need for professionals who can regulate AI outputs from a compliance perspective. Every organisation will need AI policy oversight roles over the next three to five years, according to experts.

By  Indrani Bose| Oct 14, 2025 8:19 AM

Artificial Intelligence is rewriting India’s employment playbook. A new wave of automation is changing how IT services firms, Global Capability Centres (GCCs), and startups approach talent, tilting demand away from freshers and toward mid-senior specialists with AI-driven capabilities.

“Artificial Intelligence continues to reshape India’s employment ecosystem, triggering a decisive shift in how organisations approach talent acquisition,” said Anupama Bhimrajka, VP, Marketing, foundit.

The latest foundit Insights Tracker shows that overall tech hiring in September 2025 rose by 5% year-on-year, but the mix of roles looks very different from previous years. Large-scale developer intake is giving way to niche, high-skill hiring.

AI Takes Centre Stage

AI-linked roles now account for 62% of all new tech job postings, up from 42% last year. Startups, MNCs/GCCs, and SMEs have each carved their own niche:

Startups: 26% share of AI jobs

MNCs/GCCs: 45% share

SMEs/Mid-cap IT firms: 29% share

The consequence is a sharp fall in entry-level demand. fit data shows a 24% decline in junior IT services hiring, as routine coding, testing, and quality checks are increasingly automated.

Instead, demand is soaring for AI/ML engineers, cloud architects, cybersecurity experts, and automation consultants — up 38% YoY.

GCCs: Capability over Scale

Global Capability Centres are leading this recalibration. GCCs recorded a 12% YoY increase in overall hiring, with 38% of their new roles now AI or automation linked.

Rather than chasing scale, GCCs are prioritising capability. Many are drawing experienced engineers from IT services, attracted by better pay and R&D-driven environments.

Startups: Multi-Skilled and AI-First

Startups have embraced AI as a business enabler, not just a backend tool. Hiring for full-stack developers, growth managers, and AI product leads has risen 21%, while demand for generic operational roles has dipped 11%.

Founders are seeking lean, multi-functional talent who can straddle both tech and business outcomes, a break from the siloed hiring patterns of the past.

The Experience Premium

Hiring is skewing sharply toward specialists:

Experience Level Share of IT Job Postings YoY Trend 0–3 years 21% -12% 4–6 years 30% +21% 7–10 years 17% +8%

Basic coding and bug fixes — once the bread and butter of junior engineers — are now automated. Organisations want mid-senior professionals who can drive strategy and solve complex problems.

Another structural change is the rise of contractual work. Today, 32% of tech roles are contract-based, growing 33% YoY. In AI, machine learning, and cloud, contractual hiring is up 24%, as firms chase project-specific expertise.

Net New Jobs or Job Displacement?

The question looms: is AI creating more jobs than it displaces?

Yuvraj Shidhaye, Founder and Director, TreadBinary, believes new oversight roles will emerge. “There will be a growing need for professionals who can regulate AI outputs from a compliance perspective. Every organisation will need AI policy oversight roles over the next three to five years.”

He added that while repetitive, SOP-driven tasks are at risk, new opportunities in quality control and policy implementation are already on the rise.

Beyond Tech Skills: Human Strengths

For Nipun Sharma, CEO, TeamLease Degree Apprenticeship, AI is forcing companies to value uniquely human strengths alongside deep-tech expertise.

“Deep-tech roles like AI/ML engineers, data scientists, and cybersecurity experts remain indispensable. But skills like critical thinking, emotional intelligence, and creative problem-solving are equally critical. Prompt engineers and UI/UX designers, for instance, are roles where human judgment and ethics cannot be automated,” he said.

Sharma warned that relying solely on mid-senior hiring is shortsighted. Only 20–25% of India’s 1.5 million annual engineering graduates are absorbed into field roles, a sign of narrowing opportunities for freshers. To keep the pipeline healthy, companies need structured entry-level programs, apprenticeships, and digital fluency initiatives in Tier-2 and Tier-3 cities.

The Bigger Picture

India’s IT industry is shifting from volume-based hiring to a skills-first economy. Automation may be absorbing entry-level jobs, but AI is also birthing new roles in oversight, governance, and design.

The challenge ahead is balance: scaling up specialised hiring while ensuring the next generation of engineers is not locked out.

As Bhimrajka summed it up, companies are no longer just hiring coders. “They’re building teams that can design, deploy, and refine AI-powered solutions at scale.”

First Published onOct 14, 2025 8:19 AM

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