Why Indian IIT Graduates Are Struggling to Find Jobs in the AI Era

Shubh Kumar, an IIT graduate, saw a job offer from a local startup withdrawn just weeks before his start date, illustrating a growing trend where many Indian Institute of Technology (IIT) alumni face unexpected employment challenges despite the schools' prestige and alumni like Sundar Pichai and Arvind Krishna.

Employers once favored IIT graduates, but recent data shows a sharp drop in hiring: major IT service firms hired about 100,000 graduates in FY21, projected to fall to 70,000 by FY26. TeamLease reports that IT graduate recruitment peaked at 600,000 in FY21‑22 and fell to 150,000 in FY23‑24. The Ministry of Higher Education notes that employment rates for IIT graduates fell more than 10 percentage points in the 2021‑22 and 2023‑24 academic years.

Artificial Intelligence Impact

Experts say AI and automation are reducing demand for entry‑level coding, testing, and support roles. TeamLease CEO Neeti Sharma highlights that routine, rule‑based jobs are most affected, while Randstad Digital India’s GM Milind Shah notes a 35 % global decline in entry‑level tech positions since January 2024. Counterpoint Research’s Marc Einstein adds that outsourcing‑heavy economies feel the impact most, even as AI/ML job demand rose 39 % in Randstad’s 2025 talent trends report.

Indian IITs are responding by embedding AI curricula across all engineering programs, with IIT Delhi’s AI institute reporting that every graduate now studies AI/ML, and many students gravitate toward AI engineer, data scientist, or quantitative analyst roles.

GCC Is the New Offshore Outsourcing

Global Capability Centers (GCCs) have become the primary source of IT jobs in India, with analysts predicting over 2,200 centers by 2030, a $100 billion industry employing 2.8 million people. However, GCCs now prefer experienced experts over fresh graduates, signaling a shift from mass outsourcing to an innovation‑driven talent ecosystem.

Talent experts like Abhijit Bhaduri emphasize that the industry’s transformation forces new graduates to acquire specialized skills, as illustrated by IIT Delhi’s AI graduate coordinator Shashwat Bhardwaj noting that none of their recent graduates chose traditional software engineering roles.

Reshaping the Pipeline

The mismatch between academic training and industry needs is widening, with soft skills such as collaboration and adaptability becoming critical. Companies are overhauling onboarding and training, exemplified by Tech Mahindra’s AI‑powered “skill‑as‑a‑service” platform that aligns employee capabilities with evolving business demands.

Industry groups like NASSCOM view scaling digital talent as a core competitive advantage, while education‑tech firms such as Scaler argue that the entry‑level hiring model is fundamentally changing, expanding opportunities for those with the right skill sets.

Academic institutions are adapting by increasing hands‑on projects and exposing students to advanced computing tools, as noted by IIT Delhi professor Badwaj.

Despite current challenges, long‑term forecasts remain optimistic: NASSCOM predicts India’s tech workforce will double to 10 million by 2030, with AI alone creating 2–3 million jobs. Realizing this potential will depend on effectively integrating AI, data, and cloud technologies into education and industry collaborations.

Shubh Kumar eventually secured a more demanding position, underscoring the need for perseverance and continuous skill development.