AI Dampens Tech Hiring In India, 2.3% Growth in FY26 vs FY25
India’s tech sector added just about 2.3% jobs in FY26 but grew 6.1% as AI is reshaping roles, driving productivity, and a shift toward scaled deployments and ROI.
The Gist
The industry is adapting to AI, focusing on 'Human + AI' teams and continuous skilling.
- AI is reshaping roles, emphasizing specialization and higher fluency.
- AI revenue is projected at $10–12 billion, marking a shift to scaled deployments.
- Companies are pivoting to integrate AI for internal reimagination and decision-making.
India's technology sector remained a net hirer in FY26, though the industry’s workforce grew by just 2.3% in FY26, according to the Nasscom Annual Strategic Review 2026 released in Mumbai. The industry’s total employment expanded to 59.5 lakh employees in this fiscal from 58.2 lakh last fiscal. The report estimates that over 2 million professionals were upskilled in AI during the year, including 2-3 lakh trained in advanced AI capabilities.
The industry body also expects the Indian tech industry to sustain its strong momentum, with estimated revenue of $315 billion in FY26, a 6.1% increase, led by broad-based expansion across key segments.
But do the hiring numbers reveal all is not well within the industry, one where artificial intelligence is re-shaping not just how work gets done, but how many people are needed to do it?
The industry is focused on building 'Human + AI' teams, investing in continuous skilling, and converting efficiency gains into growth. “AI is accelerating productivity and changing the nature of work, but it is also expanding the opportunity frontier. As AI gets embedded across functions, we will see roles redesigned around outcomes, deeper specialisation, and significantly higher AI fluency,” said Sindhu Gangadharan, Chairperson, Nasscom.
India's Scaled AI Revenue Pivot
The industry's AI revenue tells its own story, estimated at upwards of $10–12 billion in FY26, reflecting a decisive shift from pilots to scaled deployments. While several tech companies do not release segregated revenue numbers from AI, Nasscom said that the majority of enterprises in India want to see a return on investment with AI, which is a major opportunity for the Indian IT services firms.
Meanwhile, GCCs and Engineering and Research & Development (E&RD), the sector's fastest-growing engines, are moving up the value chain, taking on strategic ownership of functions rather than executing discrete tasks. BPM firms, long reliant on labour arbitrage, are reinventing themselves by combining AI and data to move beyond basic automation toward enabling decision-making.
“There is no chance of winning any project without AI in it. All technology companies are pivoting to use AI, not just to solve problems but also to reimagine themselves internally,” said Srikanth Velamakanni, Vice-Chairperson of Nasscom.
Rajesh Nambiar, President of Nasscom, acknowledged the broader reset. "The past year has been a reset for the global environment, but technology demand has remained resilient; shifting decisively toward productivity, measurable ROI and scaled AI deployments. India's AI advantage is widening, making organisations more agile and outcome-led,” said Nambiar.
