India’s IT services sector saw a sequential decline in headcount of 2, 938 employees across five companies – Tata Consultancy Services, Infosys, Wipro, HCLTech and Tech Mahindra – in the December quarter, highlighting the growing decoupling between workforce growth and business performance.
While the broader universe remained in contraction mode, the country’s four largest IT services firms — TCS, Infosys, Wipro and HCLTech — together reported a marginal net addition of 160 employees, effectively signalling flat headcount growth at the top end of the market despite steady deal activity and improving demand commentary.
“This sort of flat-to-negative workforce movement reflects a structural transition underway in Indian IT, rather than a cyclical hiring slowdown. As automation, artificial intelligence and platform-led execution gain scale, traditional delivery models built on linear headcount expansion are being reworked,” a staffing expert said.
Companies are increasingly prioritising outcome-led delivery, productivity gains and reuse, reducing the need to add employees in proportion to revenue growth. This shift is also changing hiring patterns, with firms focusing more on specialised and AI-aligned skills while tightening overall workforce management.
AI Pivot
Among the five companies, Tata Consultancy Services recorded the sharpest contraction, with its global headcount falling by 11, 151 sequentially. Management linked the decline to a mix of restructuring-led exits and ongoing attrition. “What we had announced as part of the restructuring, we continue to look (to) support people with deployment into future roles and wherever we are not finding success is where we are releasing,” chief human resources officer Sudeep Kunnumal said. During the quarter, around 1, 800 employees were released as part of this process. Voluntary attrition at TCS edged up to 13.5%, even as the company stepped up investments in AI skilling and next-generation capabilities.
Operational Divergence
Infosys and Wipro emerged as clear outliers, bucking the broader trend by adding employees during the quarter. Infosys added 5, 043 employees, with management citing improving demand conditions and the onboarding of freshers as key drivers. “It demonstrates we have confidence in where the market is and what we are seeing in terms of the demand,” managing director and chief executive Salil Parekh said.
Attrition at Infosys declined sharply to 12.3%, while utilisation levels softened as the company invested in future capacity. Wipro added 6, 529 employees, taking its total headcount to 242,021, and utilisation declined sequentially.
HCLTech reported a marginal headcount decline of 261 employees, even as attrition improved to 12.4%. The company continued to add freshers, with a sharper focus on skill-aligned campus hiring and premium entry-level roles.
Tech Mahindra reported a net reduction of 3, 098 employees during the quarter, taking its total headcount to 149, 616, driven by cuts across IT, business process services and sales. The company reported improved utilisation and lower attrition, signalling tighter execution as it works through its turnaround.