AI adoption leading to moderation in entry-level hiring: Report

NEW DELHI: Artificial Intelligence (AI) adoption has led firms to moderate hiring, primarily at the entry-level, according to a report.

According to a study by the Indian Council for Research on International Economic Relations (ICRIER) supported by OpenAI, AI adoption is reshaping hiring priorities across the sector.

The study finds that 63 per cent of firms reported increased demand for candidates with domain expertise and AI or data skills, pointing to a growing premium on hybrid skill sets as AI is integrated into core workflows.

Titled 'AI and Jobs: This Time Is No Different', the study represents one of the most comprehensive firm-level assessments of gen AI adoption in India to date. The study, conducted between November 2025 and January 2026, has received responses from 650 IT firms across 10 cities in India.

"Firms report a modest moderation in hiring, primarily concentrated at the entry level, alongside stability at mid and senior levels. Researchers note that this moderation aligns with broader post-pandemic trends in the IT industry and cannot be attributed to AI adoption alone," it said.

Roles commonly perceived as most exposed to AI, such as software developers and database administrators, are also among those experiencing the strongest growth in demand, indicating that gen AI is primarily functioning as a productivity-enhancing complement to technical and analytical work, rather than a substitute, it said.

Across the 1,900-plus business divisions identified as being most affected by AI, productivity gains significantly outnumber declines, the report said.

"On average, divisions reporting higher output with stable or reduced team sizes outnumber those experiencing productivity declines by a ratio of 3.5 to 1. Nearly one-third of divisions report both increased output and reduced costs, indicating that AI is enabling firms to scale output more efficiently without corresponding reductions in employment," it said.

More than half of surveyed firms report that they are already supporting AI adoption through awareness or training initiatives, with an additional 38 per cent planning to do so.

However, it said, training coverage remains limited, with only a small share of firms reporting that more than half of their workforce has received AI-related training in the past year.

Key challenges cited include difficulty finding qualified trainers, high costs and uncertain returns, ethical and legal concerns, and organisational readiness, it added.