Pakistan’s IT industry has recorded its strongest export performance on record, with IT and IT-enabled services receipts rising 21% to $4.6 billion in FY2025-26 from $3.814 billion a year earlier, according to State Bank of Pakistan data. The sector has become the country’s largest services export category, contributing nearly half of total services earnings, although it fell short of the government’s $5 billion target.
Despite the export boom, Pakistan’s technology sector is facing a growing employment challenge as artificial intelligence reshapes the industry. The Pakistan Software Houses Association (P@SHA) reported that entry-level hiring at major technology firms declined by around 25%, while employment among developers aged 22 to 25 has fallen nearly 20% since 2024.
AI adoption is also reducing demand for routine digital work. Entry-level freelance listings have dropped from around 15% of the market to below 9%, while basic writing and translation assignments have declined 32% year-on-year as businesses increasingly turn to AI tools. Some software companies have reportedly reduced delivery-side roles significantly after automating routine tasks.
Industry experts say the contrasting trends highlight a major transformation rather than a simple decline in Pakistan’s technology sector. Demand is increasingly shifting toward specialised skills such as artificial intelligence, cloud computing, cybersecurity and data engineering. The challenge is to reskill workers quickly enough to meet changing employer requirements and move the industry toward higher-value services.
At the same time, concerns remain over Pakistan’s ability to build globally competitive technology companies. Industry leaders point to weak institutions, limited technology investment, inadequate infrastructure, unreliable connectivity and a lack of trusted data as major constraints on the sector’s broader growth.
Freelancers now account for a significant share of IT export receipts, while the United States remains Pakistan’s largest technology export market, followed by the United Kingdom, UAE, Canada and Europe. However, industry experts argue that greater focus is needed on corporatisation, global investment and long-term market diversification.
The rise of AI is therefore creating both opportunities and disruption for Pakistan’s technology industry. While automation may reduce demand for routine jobs, investment in advanced skills, education, infrastructure and higher-value technology services could allow Pakistan to convert its growing IT exports into sustainable economic and employment gains.
