LTM Sees Sharp Decline in Entry-Level Engineering Jobs Amid AI Shift

Mid-tier IT services firm LTM is experiencing a dramatic reduction in entry-level engineering positions as artificial intelligence transforms the industry landscape. The company highlights that roles traditionally categorized as L0 to L2, which involve fundamental engineering tasks, are rapidly disappearing. This shift is driven by AI's ability to automate large portions of the software development lifecycle, compressing workflows and increasing operational efficiency.

Gururaj Deshpande, LTM's Chief Delivery Officer, explained in a recent interview with Business Standard that the company no longer includes L0 roles in its project bids. "We began rethinking our structure by collapsing layers from L0 to L2 and embedding an AI-native mindset into our delivery models," he said. According to Deshpande, the adoption of AI-native architecture required discarding outdated tools and redesigning operational approaches to fully leverage AI capabilities.

This transformation has led to the emergence of new positions such as AI support engineers, AI architects, and tokenomic specialists, which replace conventional testing, maintenance, and quality assurance jobs. Instead of performing routine tasks, human engineers now primarily oversee and validate the output generated by machines, reflecting a move toward supervisory roles within automated processes.

Deshpande described the AI support engineer role as a "human in the loop," emphasizing verification over execution. "Our operating model evolved around creating custom tools and identifying the necessary skill sets for these new roles," he added. This approach ensures that LTM's workforce aligns with the demands of AI-integrated projects.

With AI becoming a standard feature in both new contracts and renewals, IT services companies are prioritizing candidates who bring AI-native expertise rather than traditional engineering skills. This trend is influencing recruitment strategies, allowing firms like LTM to onboard entry-level AI-savvy engineers at lower costs. LTM anticipates hiring around 6,000 fresh graduates in the current year, despite the shifting nature of skills, roles, and career trajectories.

Alongside talent realignment, pricing structures are also evolving, though more gradually. The industry is gradually moving away from the conventional time-and-material (T&M) billing approach toward fixed-price and outcome-based models. Deshpande acknowledged that many clients remain cautious, preferring to maintain control through T&M contracts. "There is ongoing dialogue with customers about engagement models," he noted.

Regarding AI-specific rate cards, discussions are still underway. Deshpande pointed out that neither clients nor providers are ready to fully commit to new pricing frameworks yet. He stressed the importance of recognizing the value of highly productive AI-enabled engineers from day one. "If clients want engineers who can immediately utilize advanced tools effectively, they need to be willing to compensate accordingly," he said.

As of the end of Q2 FY27, LTM's total workforce numbered 88,835 employees. The quarterly attrition rate stood at 13.3 percent, reflecting ongoing changes in the IT services labor market amid rapid technological advancements.

The broader IT sector is witnessing a similar transformation as AI continues to disrupt traditional workflows. Companies across the globe are reassessing their talent pools, tools, and pricing models to stay competitive in an environment where automation and intelligent systems play an increasingly central role. LTM's experience illustrates how mid-sized players are adapting to these shifts by reimagining roles and embracing new operating models tailored to AI-driven service delivery.