India’s technology workforce is undergoing a significant transformation as Generative AI (Gen AI) adoption accelerates, reshaping recruitment patterns and compressing the base of traditional talent structures. EY’s AIdea Outlook 2026 report highlights a shift toward a diamond-shaped workforce, where mid-level and specialist roles expand while entry-level hiring contracts sharply.
The report notes that several Indian IT services firms have already reduced 20–25% of entry-level positions through AI augmentation and intelligent automation. Functions like administrative tasks, customer service, tele-calling, back-office operations, and other repetitive activities are being selectively displaced. About 64% of companies surveyed said these routine and previously outsourced roles are most affected, making junior hiring the first to feel the impact.
Leading IT firms are now slowing fresher onboarding while boosting mid-career recruitment for hybrid roles, including AI validation, orchestration, and domain-focused oversight. EY cites an example where one major firm cut entry-level hiring by nearly 30% while increasing mid-career intake by 20%.
While routine roles shrink, companies prioritize creativity, complex problem-solving, and decision-making, with AI handling execution. Overall layoffs remain limited, as spending shifts toward automation and capability-building rather than headcount reduction. The diamond-shaped model decouples revenue growth from linear staffing, emphasizing mid-senior hybrid talent over bulk fresher hiring.
