Top five IT firms shed nearly 7k jobs in FY26

BENGALURU: Headcount is passé, outcomes are the new currency. India’s top five IT services firms witnessed 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 fresherheavy 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 AInative 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 showed total industry headcount rose by 1.4 lakh to 59 lakh in 2026, marginally higher than last year’s addition of 1.3 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 firm 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 said firms are increasingly prioritising experienced talent that can work with frontier technologies at scale.