### Declining Hiring Projections
According to Teamlease, a prominent mass staffing firm, IT services companies have revised their hiring projections for the latter half of 2025 down to a modest 1-3%, a stark decrease from the earlier forecast of 3-5%. This adjustment reflects a broader trend of caution within the industry, as companies grapple with fluctuating global demand and rising operational costs.
Aditya Mishra, the managing director and CEO of CIEL HR, noted that the initial expectation for a net headcount increase of 10-11% at the beginning of the fiscal year has now been tempered to a more conservative estimate of 6-8%. This shift indicates a significant shortfall, with the industry currently facing a deficit of approximately 150,000 hires compared to earlier projections.
### Contraction in Software Engineering Roles
The demand for software engineers has seen a sharp contraction, with hiring growth now largely confined to emerging technology roles. This trend underscores a shift in focus within the industry, as companies prioritize skills in areas such as artificial intelligence (AI) and machine learning (ML) over traditional software development roles.
Data from Adecco India further illustrates the downturn, revealing that overall hiring in the first half of 2025 has declined by nearly 7% compared to the previous year. This decline is attributed to a combination of global demand slowdown and persistent cost pressures that have forced companies to reevaluate their workforce strategies.
### Global Trade Uncertainties
Sanketh Chengappa KG, the business head of professional staffing at Adecco India, emphasized that global trade uncertainties are influencing hiring decisions for nearly 90% of IT companies. The ongoing tensions between the US and India, particularly regarding potential tariff changes, have created an environment of caution. Companies are hesitant to increase their technology outsourcing spending until there is greater clarity on the cost implications of these tariffs.
The anticipation surrounding the Trump administration’s HIRE Act, which aims to halt the international relocation of employment, has further complicated the hiring landscape. Experts suggest that this uncertainty may persist for the next two quarters, leading to a more measured approach to workforce expansion.
### A Glimmer of Hope
Despite the prevailing challenges, some recruitment agencies remain cautiously optimistic about the future. Teamlease anticipates a mild recovery in IT hiring, projecting a 2-4% increase in the October-December quarter following a decline of 2-3% in the previous quarter. This potential uptick is expected to be driven by an increase in fresher intakes and a rising demand for digital skills.
Neeti Sharma, CEO of Teamlease Digital, noted that there will be project-linked hiring, particularly in roles related to generative AI and cybersecurity, as well as seasonal demand for the fourth quarter delivery cycles. This suggests that while the overall hiring landscape may be subdued, specific niches within the industry continue to show promise.
Adecco’s outlook for the latter half of the year is more optimistic, predicting a 15-20% growth in both fresher and mid-level hiring. This divergence in forecasts highlights the complexity of the current hiring environment, where some segments are experiencing growth even as others face contraction.
### The Impact of Major Players
The slowdown in hiring is not limited to smaller firms; even industry giants are feeling the pinch. Tata Consultancy Services (TCS), India’s largest IT firm, recently announced plans to lay off 2% of its workforce, equating to approximately 12,000 employees, in the financial year ending March. This decision reflects a broader trend of muted business growth, compounded by the impact of AI on traditional job roles.
Experts in the outsourcing sector predict that companies will adopt a more cautious hiring approach, focusing on niche talent in AI, ML, and data science roles. Mishra from CIEL HR noted that while demand for these specialized skills remains steady, the overall hiring landscape is characterized by freezes or very cautious additions due to the ongoing uncertainties related to US tariffs.
### Conclusion
The Indian IT hiring landscape is currently navigating a complex web of challenges, from global trade uncertainties to shifting demands for specific skill sets. While some recruitment firms project a potential recovery in the latter half of 2025, the overall outlook remains cautious. As companies adapt to the evolving market conditions, the focus on niche skills in emerging technologies may provide a lifeline for the sector. However, until there is greater clarity on global trade dynamics, the hiring environment is likely to remain subdued, reflecting the broader economic uncertainties that continue to shape the industry.
