Top 5 Indian IT companies shed nearly 7,000 jobs in FY26, reversing FY25 gains

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.

The traditional fresher-heavy pyramid is being reshaped. A people-plus-AI model is upending its foundation, putting a premium on problem solvers who can effectively work alongside AI.

TCS, Infosys, Wipro, HCLTech, and Tech Mahindra together shed 6,981 employees in FY26, compared with net additions of 12,718 in FY25. TCS led the pullback with a reduction of 23,460 employees, while Tech Mahindra cut 1,108.

While hiring has not fallen to FY24 levels—when the sector saw steep cuts of over 69,000 jobs—the uneven recovery signals limited growth visibility and a clear shift towards 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.

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.

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. Even as overall growth stagnates, hiring is shifting towards domain-specialised, industry-focused roles. Much of the incremental 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—not 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, principal analyst at Constellation Research, adding that this will likely coincide with overall workforce reductions.

After aggressive pandemic-era hiring—when these firms added over 273,000 employees in FY22—the sector is now recalibrating workforce strategies amid slower discretionary spending, rising automation and the growing adoption of AI-led productivity tools.