Mid-size IT firms slow hiring as AI boosts productivity

Now with corporations pivoting in direction of AI in a giant method, this slowdown is more likely to change into extra distinguished, tightening the hiring security web in India’s IT companies sector
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Mid-size IT corporations moderated hiring within the December quarter as many reported larger income per worker pushed by AI productivity.

Within the newest quarter, mid-size firms Coforge, KPIT Applied sciences, Mphasis, Hexaware and LTIMindtree collectively reported half the online provides of the earlier quarter; from over 4,000 staff in Q2 to over 2,000 staff in Q3. Firms like KPIT lessened workforce by 155 staff in Q3. Many officers attributed the slowdown to the arrival of AI.

Whereas these corporations proceed to carry out higher than large-cap firms which were displaying a downward pattern in hiring for the previous couple of quarters, the cautious strategy now adopted by mid-caps signifies rising stress for aspirants to prime their specialised AI-ready abilities.

“Midcap corporations are much more cautious in relation to their hiring focussing on ability specialisation, value of hiring, retention and many others., signalling a shift from volume-driven hiring to solely focused, role-critical recruitment,” mentioned Neeti Sharma, CEO, TeamLease Digital, which famous explicit moderation when it comes to web new additions and brisker consumption, even as demand for particular abilities continues to develop.

Dissociating individuals and income

Firms like KPIT and Coforge have publicly spoken concerning the influence of AI on hiring traits. Talking to businessline, Kripa Hardikar, KPIT Applied sciences, Chief Monetary Officer, mentioned the corporate is disassociating the people-based income mannequin to a metamorphosis solution-based mannequin consistent with its AI ambitions.

“Whereas we’re recruting freshers, we’re hiring a high crucial expertise pool. So basically, already we’re disassociating individuals and income. That affiliation will now not maintain true shifting ahead,” she mentioned.

Coforge too reported excessive income per worker, crossing $71,000 every year, attributing it to the prominence of outcome-based contracts in current quarters which enhance each the income per worker and margins. In flip, it leads to decrease headcount addition as in comparison with income development, mentioned Saurabh Goel, Chief Monetary Officer, Coforge Ltd.

Within the midst of the hiring crunch within the IT business, the mid-size firms had been a protected haven for the mass of candidates searching for a job within the business. Nevertheless, even by the center of 2025, Greyhound Analysis reported that tier-2 firms are starting to slowdown hiring pipelines with sentiment amongst CHROs dropping from 44 per cent optimism in March 2025 to 23 per cent in simply June 2025, as a consequence of macroeconomic uncertainty. Now with corporations pivoting in direction of AI in a giant method, this slowdown is more likely to change into extra distinguished, tightening the hiring security web in India’s IT companies sector

AI and workforce

Hexaware, which has elevated web provides for the previous few quarters, informed businessline that the pattern will proceed for the corporate. On the similar time, R Srikrishna, CEO of Hexaware, mentioned, “It’s true that for sure programmes, we’ll want fewer individuals than we did up to now due to AI, however we’re nonetheless hiring individuals.”

In response to TeamLease, AI is bettering productivity per worker, which naturally suppresses quantity hiring, even as it sustains sturdy demand for knowledge, AI, cloud and platform engineering abilities.

“Whereas routine, execution heavy roles are shifting to AI brokers, the demand for specialised expertise is growing. The rapid discount in hiring amongst mid-size firms is a mix of AI adoption and structural modifications included by the firms as a part of their long-term strategic roadmap,” mentioned Sharma.

Printed on February 8, 2026