IT Hiring to rebound with a focus on GenAI and cybersecurity

After a challenging 2024, India’s IT sector is projected to experience a 15-20% increase in job opportunities, driven by economic recovery and advancements in AI and cybersecurity. However, the US H-1B work visa programme, which allows employers to hire foreign workers, may pose challenges.

ICRA’s analysis of the Indian IT services industry highlights a sharp slowdown in hiring activity through FY24 and into FY25, exacerbated by a rise in employee attrition. The seven-quarter period leading up to Q1 FY2025 showed negative net employee additions for its sample set companies. Among the leading IT firms, TCS, Infosys, and Tech Mahindra reported modest net employee additions of 8,000-11,000 each in H1 FY2025, while companies like HCLTech and Wipro experienced continued negative net additions to their workforce.

Experts foresee positive signs for IT hiring, with easing macroeconomic challenges and significant global elections, including in the US, boosting organisational confidence in the economic outlook.

Kamal Karanth, Co-founder of Xpheno, an IT hiring firm, notes that the hiring outlook for 2025 appears healthier than in 2024, particularly for the JFM 2025 quarter, as enterprises express hiring intentions to positively kick off the new fiscal year. However, he believes that hiring volume and velocity are not yet fully aligned; while companies may indicate hiring plans, actual hiring activity needs to increase for these intentions to translate into real openings.

Demand for specialised roles in AI, data science, and cybersecurity is expected to rise significantly, with a 30-35% increase. Additionally, hiring in Tier-II cities grew by 48% in 2024, indicating a trend towards geographic diversification in job opportunities. Research by Adecco shows a 39% surge in demand for AI and Machine Learning roles, underscoring a shift towards specialised skill sets as organisations prioritise these technologies.

Sunil Nehra, CEO of IT Staffing at FirstMeridian Business Services, anticipates that emerging technologies will drive job growth in 2025, with India’s tech ecosystem expecting a 10-12% increase.

Karanth also highlights that the tech sector and IT talent are key drivers of hiring activity, with the return of hiring from IT services and tech startups set to spur growth.

Sustained hiring by Global Capability Centres (GCCs) is also expected to impact talent growth in 2025. After a decline in net additions in 2023 and 2024, a return to healthier growth rates is anticipated in 2025. As macroeconomic headwinds ease and election results in major economies, particularly the US, provide clarity, organisations are likely to regain confidence and make capital investments, revitalising deal flow in early 2025.

The Indian IT/tech ecosystem, projected to contribute 10% to India’s GDP by 2025, is on a promising growth trajectory with workforce expansion as a critical component. In 2024, the sector saw a 17% increase in new employment opportunities due to rapid digital transformation and rising demand for niche tech roles. As we approach 2025, this trend is expected to continue, with a 20% rise anticipated in profiles such as application developers, software engineers, DevOps engineers, and specialists in AI, ML, and cybersecurity.

The AI sector, which gained momentum in 2024, is expected to expand further in 2025, with high demand for roles like data analysts and data scientists. The GenAI industry alone is projected to create 1 million new jobs by 2028, significantly contributing to the nation’s GDP. Salaries for GenAI positions are forecasted to rise by 25-30% for mid-level roles, he says.

However, the US H-1B visa policies could pose challenges, especially with Donald Trump returning to power this year, which may lead to stricter visa regulations prioritising US-educated or higher-skilled applicants. This is despite reports that several leading IT companies, such as Tata Consultancy Services (TCS), Infosys, Wipro, and HCL Technologies, have consistently been among the top employers of H-1B visa holders.

Data released by the US Citizenship and Immigration Services shows that Indian tech companies secured 20% of all H-1B visas issued. India received approximately 78% of the 265,777 H-1B visas issued by the US in the fiscal year ending 30 September 2023, highlighting the crucial role of Indian professionals in the US tech industry.

Experts predict that Indian IT giants may face operational disruptions and increased visa costs, prompting them to increase local hiring in the US. Nonetheless, they believe 2025 is expected to be a year of recovery and growth for the Indian IT sector.