Tata Consultancy Services (TCS) reported a marginal increase in employee count in the January–March quarter, even as the full-year numbers point to a continued contraction in workforce amid a shift towards an AI-led operating model.
The country’s largest IT services firm added 2,356 employees during the fourth quarter, taking its total headcount to 584,519 at the end of March from 582,163 in the December quarter. The increase reverses a decline seen in the previous two quarters, including a sequential drop of 11,151 employees in the third quarter.
Hiring rebound amid AI-led shift
The recovery in hiring comes against the backdrop of structural changes in the sector, with companies recalibrating workforce requirements in line with automation and AI-led delivery models. TCS had announced in July last year a workforce reduction of around 2%, impacting over 30,000 employees.
Despite the uptick in the March quarter, the company’s overall employee base declined sharply over the full fiscal year, indicating that hiring remains measured and targeted rather than broad-based.
Chief Executive Officer K Krithivasan said the company incurred restructuring expenses of Rs 1,388 crore in FY26, with the exercise completed in the third quarter, signalling the scale of internal realignment undertaken during the year.
Attrition trends suggest that employee churn remains elevated. Voluntary last twelve-month attrition in IT services stood at 13.7% at the end of March, up 20 basis points from 13.5% in the previous quarter.
Senior management indicated that the focus is shifting towards building capabilities aligned with emerging technologies. “We are pleased to implement annual salary increases across all grades effective April 1, with top performers getting a double-digit increase. In Q4, we continued to invest in a future ready workforce with strong additions across experienced talent and campus hires. Building an AI first culture and equipping our people with AI ready skills remained a key priority in FY26 and will continue into FY27, as we align closely with our customers’ evolving needs,” Sudeep Kunnumal, chief HR officer at TCS, said.
Workforce training ramps up in FY26
The company said it has intensified investments in training and capability building. In FY26, employees completed 69 million learning hours and acquired 5.2 million competencies. Over 270,000 employees now have skills in AI and machine learning, while more than 100,000 have been trained through its GenAI-powered learning platform.
“In FY26 we also hired over 750 employees with deep advisory and consulting expertise. We stepped up our investments in talent development initiative as well,” Kunnumal said.
TCS also highlighted ongoing support to employees in West Asia amid the continuing conflict in the region.
Women accounted for 35.2% of the total workforce at the end of the fiscal year.