Archive · 28 Jul 2026
AI Drives Structural Shift in IT Hiring
The IT services industry is changing because of Artificial Intelligence (AI).
For many years, when IT companies made more money, they also hired more people.
But now, AI helps companies do the same work with fewer people.
This means that even if IT companies start making more money again, they won't hire as many people as they used to.
Instead, they are looking for people with special skills in AI, cloud computing, and cybersecurity.
This change is not temporary; it's a big, permanent shift in how the IT industry works.
Companies are also spending more on AI and training their workers to use these new technologies.
So, while the IT industry will still grow, it won't create as many jobs as it did in the past.
IT services revenue growth has been low single digits since FY24 due to macroeconomic pressures and AI disruption.
AI is breaking the traditional link between revenue growth and hiring in the IT sector.
Companies are reducing hiring for traditional roles and focusing on specialized skills like AI, cloud, and cybersecurity.
Net hiring has been flat for the past two years, with no significant additions.
The IT industry's future will depend on professionals reskilling in AI and related technologies.
- Who
- Aditya Jhaver, Director, Crisil Ratings
- What
- Structural shift in IT hiring due to AI
- When
- Since FY24
- Where
- Global IT services industry, primarily in the United States and Europe
- Why
- AI-driven productivity gains and changing enterprise spending behavior
Structural Shift Advocates
Traditional IT Model Supporters
Impact of AI on Hiring
Structural Shift Advocates
AI and automation are fundamentally changing the hiring landscape, reducing the need for traditional roles and increasing demand for specialized skills.
Traditional IT Model Supporters
The traditional IT model has been successful in job creation and should continue to be a significant employer.
Revenue Growth and Hiring
Structural Shift Advocates
Revenue growth will not translate into proportional hiring increases due to AI-driven productivity gains.
Traditional IT Model Supporters
Historically, revenue growth has been closely linked to hiring, and this relationship should persist despite AI advancements.
- Sector Growth
- Low single digits since FY24
- Major Markets
- United States and Europe (85% of revenues)
- Net Hiring FY23
- 96,000 employees
- Current Net Hiring
- Virtually no meaningful additions
- R&D Spending
- 1-2% of revenue (Indian IT companies) vs. 15-20% (global AI leaders)