Broader engineering sectors had started to witness slowdown in formal hiring since FY24

India's job market was getting tough for engineers

Tata Consultancy Services’ decision to cut over 12,000 jobs globally has raised concerns about the health of the Indian IT sector. However, a Moneycontrol analysis of EPFO data suggests that the slowdown in engineering and technology-linked employment growth began well before FY25, even as the broader economy delivered strong numbers.

While net formal job additions under the Employees’ Provident Fund Organisation (EPFO) declined 1.3 percent in FY25, following a 5.1 percent drop in FY24, the contraction was more pronounced in engineering-related fields. Jobs under the "engineering contractors" category fell 6.5 percent in FY24 and another 3.7 percent in FY25.

From the peak in FY23, total net additions to EPFO-linked jobs fell by 10 percent in FY25, with just 7.3 lakh new jobs added across the year. The share of engineering contractor jobs in total formal employment has now held steady at 5.7 percent for two consecutive years, compared to 6.7 percent in the pre-pandemic period.

The weakness extends beyond engineering contractor roles. Establishments engaged in electrical, mechanical, and general engineering products witnessed a 4.9 percent decline in net job additions between FY23 and FY25. Their contribution to total EPFO-linked employment fell to 4.3 percent in FY24 and FY25, down from 4.9 percent in the two years before the pandemic.

Similarly, expert services, which cover a broad range of professional, staffing, and consultancy firms, recorded a 7 percent decline in net job additions between FY23 and FY25.

Amid the softness in tech and engineering-linked segments, some sectors posted contrasting trends. Financing establishments, including banks and NBFCs, registered an 11 percent increase in formal job additions during the past two fiscal years. Meanwhile, the building and construction sector posted a 6 percent rise in employment, indicating continued infrastructure momentum.