TCS Headcount Contraction Drags Indian IT Net Hiring

India’s top-tier IT sector has hit a historic low in workforce expansion, as the combined net hiring for the “Big 5” firms—TCS, Infosys, Wipro, HCLTech, and Tech Mahindra—stagnated at a staggering 17 employees for the first nine months of the 2025-2026 fiscal year.

This near-zero growth marks a dramatic shift from the hyper-hiring era and reflects a “tech wreck” driven by high-scale automation and cautious global spending.

IT Net Hiring: The TCS Impact and Sector Stagnation

The primary drag on these figures came from Tata Consultancy Services (TCS), the industry leader.

While TCS reported a massive headcount of over 600,000, recent quarterly contractions in its workforce heavily offset the marginal gains made by its peers.

For the nine-month period ending December 31, 2025, the collective net addition of just 17 people across five companies—which together employ over 1.5 million professionals—indicates a complete hiring freeze at the net level.

AI and Automation Replace the “Bench”

Industry analysts point to a fundamental shift in the IT business model. Companies are no longer stockpiling talent on “benches” to prepare for future projects.

Instead, they are utilizing Generative AI and internal automation to improve employee utilization rates.

• Utilization Peaks: Most firms reported utilization rates between 82% and 86% this quarter, the highest in several years.
• Leaner Operations: By doing “more with less,” firms like Wipro and HCLTech have managed to grow their revenues while keeping their total headcount flat or even negative.

IT Net Hiring: Attrition and Entry-Level Slowdown

While voluntary attrition has cooled significantly—dropping to a range of 12% to 15% across the board—the lack of replacement hiring is what has stalled net growth.

The Big 5 have significantly reduced their campus intake targets for 2026, opting instead to train existing staff in specialized AI and cloud roles.

Financial Outlook

Despite the hiring slump, the Big 5 reported improved operating margins this quarter, largely due to reduced employee costs and lower sub-contracting expenses.

However, the lack of headcount growth suggests that the industry is bracing for a prolonged period of tepid demand from key markets like the US and Europe.

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