After the vanishing of the tech middle class, entry-level tech hiring is facing a historic downturn globally and in India. Big tech isn’t just hiring fewer freshers—it’s almost abandoning them.
Only 7% of Big Tech hires are now new grads. In the US, new graduate hires at big-tech firms have plummeted over 50% since 2019, according to SignalFire’s latest State of Talent report.
In India, the situation mirrors this trend, with IT hiring down 7% year-over-year, and freshers facing widespread campus hiring freezes, even though the promise is of hiring one lakh freshers this year.
According to the same report, startups are barely hiring new grads this year, with under 6% of hires coming from “elite” AI labs. These labs are looking for top talent and want to retain them.
For new graduates attempting to enter the tech industry at this time, they are facing a competitive landscape characterised by a decrease in job openings, heightened competition, and an increasing tendency to favour experienced candidates or, even more daunting, AI solutions over less experienced individuals.
Indian IT firms like TCS, despite being India’s largest IT services firm, added only 625 employees in Q4 of FY25—a clear indicator of cautious and selective hiring. But AI didn’t impact hiring, at least that is what the firm claims.
Many of the tasks traditionally assigned to L1 engineers, such as basic code writing, testing, and routine ticket handling, are now being handled with minimal human intervention by AI systems.
But AI is not entirely to blame. According to a Grammarly survey from last year, 61% of Gen Z assert that they can’t imagine completing work tasks without using GenAI, compared to 56% of millennials, 53% of Gen X-ers, and 41% of baby boomers.
This comes as big firms like Microsoft, IBM, Salesforce, and several others are laying off thousands of employees to become AI-first companies.
The Intern-to-Hire Pipeline Is Drying Up
According to the SignalFire report, even the top computer science graduates struggle to land jobs after 6 months of graduation, as the dream roles at big tech companies are shrinking faster than ever.
Even internships, a traditional gateway for students, aren’t the safe bet they once were. According to Indeed data from last year, internship listings have now fallen below 2019 levels, despite peaking in 2022. The number of job openings for mid-level and fresh engineers decreased as well.
Automation is quietly rewriting the entry-level job description. Tasks once reserved for junior engineers, like basic testing, documentation, and simple bug fixes, are now increasingly being handled by AI tools.
The report states that companies are posting lower-level roles and hiring experienced people to fill them. The junior talent pipeline isn’t shrinking, but is being rerouted entirely. This trend is alarming, not just for job seekers but for the future of the tech workforce itself.
India’s $300-billion tech industry continues to grow, but it’s not translating into opportunities for freshers. According to India Briefing, the sector added 126,000 net new jobs in FY24-25, but nearly all came from Global Capability Centres (GCCs), not IT service giants.
“With muted revenue growth and slow demand recovery, large-scale fresh hiring will likely be a difficult objective for Indian IT companies in FY26,” cautions Krishna Vij, VP of hiring at TeamLease Digital, in a conversation with AIM earlier. “The urgency to hire has diminished, and onboarding will be closely aligned with actual project requirements.”
Infosys reportedly laid off 350 newly onboarded engineers in early 2025 and postponed trainee assessments, indicating a troubling sign of how risk-averse the sector has become.
“Unfortunately, for the last three years, fresher engineers have not got the jobs they’re looking for from services companies,” Neeti Sharma, CEO at TeamLease Digital, told AIM.
Meanwhile, roles are migrating out of the tier-1 cities. In Q3-2024, tech job growth in India’s Tier 2 cities rose 48%, suggesting companies are chasing cheaper talent while dodging the pressure to hire fresh grads.
There’s a silver lining
Companies that hire freshers are investing more in mentorship. More grads are proactively learning AI and data tools to stay relevant, which is especially relevant for Indian IT firms. Mid-career hiring is seeing a cautious rebound. For now, one thing is definitely clear: entry-level tech jobs aren’t as secure as they once were—they’re slowly disappearing.
Though some of this drop can be attributed to the overhiring of engineers during the pandemic, the situation is concerning.
Engineering and R&D-focused (ER&D) companies are grappling with a growing talent crisis in India. A recent report by Bain & Company reveals that 73% of these firms are already experiencing significant talent gaps—a challenge expected to intensify as baby boomers retire at a pace that leaves behind the arrival of new graduates who can replace them.
While claims that software engineering jobs are dying have been repeated several times over the last few years, it has also been reiterated that engineers who use AI will be able to ride the wave. Speaking with AIM earlier, the head of operations of a firm setting up its GCC in Bengaluru said that they aimed to hire around 150 engineers.
They targeted engineers equipped with their own AI tools, capable of showing that they could perform the tasks of five engineers. But on the flip side, junior developers who heavily rely on AI tools for work cannot write code without these newer tools.
Whether this is a temporary blip or a systemic change remains to be seen. But one thing’s certain: if someone is trying to enter the tech industry today, they would need more than a degree and a dream—they would need grit, timing, and a solid Plan B.
