AI adoption slows entry-level hiring at Indian firms: report

AI adoption has led Indian firms to slow hiring at the entry level, according to a report by the Indian Council for Research on International Economic Relations (ICRIER) supported by OpenAI.

The study, based on responses from 650 IT companies across 10 cities, found that 63% of firms see increased demand for candidates with domain expertise and AI or data skills.

Researchers noted that hiring moderation at entry levels aligns with broader post-pandemic industry trends and is not solely due to AI integration.

The report also indicated that roles such as software developers and database administrators remain in high demand, with AI primarily enhancing productivity rather than replacing jobs.

Productivity gains were observed in over 1,900 business divisions most affected by AI, with many divisions reporting increased output and reduced costs without corresponding reductions in employment.

More than half of surveyed firms already support AI training initiatives, and 38% plan to do so.

🔗 Source: The Economic Times

🧠 Food for thought

Implications, context, and why it matters.

The real story is the massive AI training gap

More than half of surveyed firms already back AI training initiatives. Another 38% plan to start. AI rollouts still move faster than formal training at many firms 1.
Just 4% of Indian IT firms have trained more than half of their workforce in AI, which leaves a wide skills gap 2.
AI use keeps climbing. One report says 92% of employees in India use AI several times a week or more 3.
Companies hit practical roadblocks. Training costs run high. Qualified trainers are hard to find. Returns can look uncertain 4.

AI skills demand is spreading beyond traditional IT services

Entry-level hiring has cooled at Indian IT services firms. Recruiters still look for domain expertise plus AI or data skills. These abilities now matter across job families, not only specialist roles.
India’s Global Capability Centres (GCCs) are offshore hubs multinationals set up in India for functions like engineering, analytics, or finance. They may add 2.8 to 4 million jobs by FY30 (2029-30). Almost one in five roles may go to freshers with digital skills such as AI, cloud, data engineering, or cybersecurity 5.
Public efforts also treat AI literacy as a broader need. Kerala runs a programme to train 600,000 parents in AI literacy through public schools 6.