AI Influence on Workforce: Entry-Level Hiring Declines, Report Shows

The rise of Artificial Intelligence (AI) is influencing workforce dynamics in India, leading to a reduction in entry-level hiring. A recent report by the Indian Council for Research on International Economic Relations (ICRIER), with support from OpenAI, highlights these shifts in hiring practices and skill demands within the technology sector. The report states that 63% of surveyed companies are increasingly seeking candidates with domain knowledge and skills in AI or data analysis, illustrating a growing inclination towards hybrid skill sets as organisations integrate AI into their operations.

Titled 'AI and Jobs: This Time Is No Different', the study marks one of the most exhaustive analyses on generative AI adoption in India to date. The research was conducted from November 2025 to January 2026, incorporating feedback from 650 IT firms across ten major cities in India.

The findings indicate a moderate decrease in entry-level job opportunities, while mid and senior-level positions remain stable. The report aligns this moderation with broader trends in the IT sector following the COVID-19 pandemic, asserting that the slowdown cannot be solely attributed to the influx of AI technologies.

Interestingly, roles deemed highly susceptible to AI disruption, such as software developers and database administrators, are experiencing a significant uptick in demand. This suggests that AI is acting more as a booster for productivity rather than a direct replacement for these positions.

According to the report, divisions most impacted by AI exhibit a notable productivity increase. Specifically, firms report that the number of divisions achieving higher output while maintaining or reducing team sizes far exceeds those facing declines in productivity, at a ratio of approximately 3.5 to 1. Furthermore, around one-third of these divisions noted both increased productivity and reduced operational costs, indicating that AI is helping firms expand output effectively without necessitating job cuts.

Despite these shifts, training initiatives to support AI integration within firms have been limited. Just over half of the surveyed companies reported that they are actively promoting AI training or awareness programs, while an additional 38% have plans to implement such initiatives in the near future. Still, the actual training coverage is modest, with only a small fraction of companies stating that more than half of their workforce has received AI-related training over the past year. Key challenges identified include the scarcity of qualified trainers, high training costs, concerns over ethical implications, and overall organisational readiness to adapt to rapid changes brought by AI advancements.

As businesses navigate the evolving landscape shaped by AI, the implications for workforce recruitment and skill development are becoming increasingly evident, highlighting the need for both companies and employees to adapt to the changing demands of the labour market.