Top 5 Indian IT firms shed nearly 7k jobs in FY26

Bengaluru: Headcount is passé; outcomes are the new currency.India's top five IT services firms slipped back into net workforce contraction in FY26, reversing the modest hiring recovery a year earlier, as demand uncertainty, delayed decision-making and AI-led efficiency gains weighed on headcount. TCS, Infosys, Wipro, HCLTech and Tech Mahindra together reduced their workforce by 6,981 employees in FY26, compared with net additions of 12,718 in FY25.The numbers are less about a collapse and more about a recalibration. The traditional IT model — where revenue growth was closely tied to headcount expansion — is beginning to break, analysts said. Though hiring has not fallen to FY24 levels — when the sector saw steep cuts of more than 69,000 jobs — the uneven recovery signals limited growth visibility and a clear preference for efficiency over scale. Hiring is increasingly focused on AI-native talent, problem solvers and specialists in areas such as AI, data, cloud, and cybersecurity. Infosys, Wipro and HCLTech continued to add employees, albeit cautiously, reflecting selective hiring and tighter control on utilisation and margins. The broader trend points to a structural reset in the sector. Nasscom data shows total industry headcount rose by 1.35 lakh to 5.9 million in 2026, marginally higher than last year's addition of 1.33 lakh. Much of the incremental hiring demand is being driven by global capability centres (GCCs), which continue to expand their mandates in India for the third consecutive year. "There is a macro slowdown element, especially in discretionary spend, but AI is the bigger underlying force. This isn't because it is replacing jobs overnight, but because it is fundamentally changing delivery economics. Clients want outcomes, speed and productivity gains, not just headcount," said Phil Fersht, CEO of US-based IT advisory HFS Research. Infosys CEO Salil Parekh's commentary on talent reflects this shift. The company is broadening hiring beyond a single skill profile, bringing in diverse, AI-aligned talent with differentiated starting pay. It is also building forward-deployed engineering teams — customer-facing engineers embedded with clients — to co-develop and deploy AI-led solutions faster. Analysts say firms are increasingly prioritising experienced talent that can work with frontier technologies at scale."We expect many firms to reach 20% digital labour over the next 24 months and lift average revenue per employee from $50,000 to $80,000," said Ray Wang, the principal analyst at Constellation Research, adding that this will likely coincide with overall workforce reductions. After pandemic-era hiring of more than 273,000 employees in FY22, the sector is now recalibrating amid slower discretionary spending, automation and rapid AI adoption.
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