The tech job landscape for new graduates has seen a major shift, driven by the rise of artificial intelligence and changing economic conditions. According to a report by venture capital firm SignalFire in May 2025, hiring of fresh graduates at top tech companies like Google, Amazon, Apple, Microsoft, Meta, Nvidia, and Tesla has dropped by over 50 percent since 2022. Today, recent graduates account for only 7 percent of new hires at these firms, a sharp decline from previous years. Even graduates from elite universities are struggling to find roles, often spending more than six months searching for jobs.
Hiring Freeze Hits Fresh Graduates in US and India
In the United States, this decline is particularly severe. The unemployment rate for new college graduates has risen by 30 percent since late 2022, compared to just 18 percent for the general workforce. Employers have grown hesitant to hire young workers, with surveys revealing that 55 percent of managers believe Gen Z struggles with teamwork, and 37 percent would prefer using AI tools over hiring a Gen Z employee. Additionally, cities like Miami and San Diego are gaining tech talent due to lower costs and better quality of life, while former tech hubs such as Austin and Houston are losing momentum.
India is facing similar challenges. Despite a $300 billion tech industry, IT hiring has dropped 7 percent year-over-year. Large firms like TCS and Infosys have either delayed or cancelled hiring plans, and many have frozen campus recruitment entirely. In one case, Infosys laid off 350 newly hired engineers in early 2025. Internships, once seen as a stepping stone into the workforce, are also declining. Data from Indeed shows internship postings have fallen below 2019 levels.
AI Disruption and Skills-Based Hiring Redefine Entry-Level Tech Jobs
Several factors contribute to this situation. Many entry-level jobs now require prior experience, creating a paradox where one needs experience to get experience. AI is automating tasks traditionally performed by junior engineers, and companies now prefer candidates who can collaborate with AI systems. Budget constraints and cautious investor sentiment have led to smaller teams and leaner hiring practices.
Despite the downturn, there are signs of hope. Companies are focusing more on skills-based hiring, valuing real-world experience and problem-solving over academic achievements. Roles in engineering and research and development still show strong demand, with 73 percent of companies reporting skill shortages. Graduates who can effectively work with AI, rather than rely on it completely, are more likely to succeed. The job market is changing, and future success will depend on adaptability, persistence, and continuous learning.
Summary:
AI and economic shifts have drastically reduced tech hiring for fresh graduates, with top companies cutting graduate recruitment by over 50% since 2022. Internships are also declining. Entry-level roles demand experience and AI collaboration skills. However, skills-based hiring and R&D demand offer hope for adaptable, AI-ready job seekers.
