India’s technology job market is shifting as the AI push changes hiring patterns across companies, staffing firms said on December 26, 2025. Employers are cutting permanent entry-level roles, expanding contract hiring, and resetting pay structures as AI tools take over routine work, affecting new graduates most.
What changed in tech hiring
The AI push has reduced permanent recruitment in several technology functions. Contract, gig, and internship roles now account for 60–75% of hiring in AI-linked tasks such as data annotation, model testing, GenAI content support, and prompt engineering, according to foundit.
Companies now rely on leaner teams. Flexible staffing models are preferred for entry-level roles to manage costs, said Arindam Mukherjee, co-founder and CEO of NextLeap. Short-term engagements are being used while enterprises test and scale AI deployments.
Impact on entry-level workers
The AI push has altered hiring at the bottom of the talent pyramid. Freshers formed about 15% of total IT hiring in 2025, said Kapil Joshi, CEO of IT Staffing at Quess Corp. Mid-level professionals accounted for nearly two-thirds of demand as firms sought immediate productivity.
Contract-to-hire models are spreading. Employers use them to assess skills and AI readiness before offering long-term roles, said Shantanu Rooj, founder and CEO of TeamLease Edtech. Permanent roles are now linked to the ability to work with AI systems rather than years of experience.
How salaries are being reset
The AI push is also influencing compensation. Pay for coding, testing, and support roles has come under pressure as AI tools automate parts of this work. At the same time, AI-aligned roles such as data engineering, applied AI, cybersecurity, and model lifecycle management command higher pay.
Quess’ AI Skill Trend Report showed GenAI roles offering salaries 15–20% higher than standard machine learning jobs. Yet hiring caution remains. Time-to-fill for niche AI roles has extended to 45–60 days, pushing firms to adopt layered pay structures.
Entry-level AI hires often receive lower fixed pay with strong training components. Senior professionals benefit from variable pay and project-linked incentives, staffing executives said.
Hiring beyond elite campuses
The AI push has widened hiring beyond top-tier institutions. Foundit data showed 52% of entry-level roles now filled through internships, project work, and AI operations teams, largely by graduates from non-premium colleges. Permanent hiring fell to 48%.
Skill-based hiring is gaining ground. Certifications, apprenticeships, and work-integrated learning are helping candidates access roles once limited to elite campuses, Rooj said.
