In the December quarter, India’s top IT services companies reported a minimal increase in their workforce, despite healthy demand and deal pipelines. The sector as a whole saw a net decline of nearly 3,000 employees, with the top firms collectively adding only about 160 workers. This trend is not seen as a temporary slowdown, but rather as evidence of a fundamental change in the delivery models of IT services. The use of artificial intelligence, automation, and platform-based execution is gaining traction, allowing firms to achieve productivity gains and reduce their reliance on traditional human-intensive delivery.
The decline in headcount is not uniform across all companies. Tata Consultancy Services (TCS) reported the largest drop, shedding over 11,000 roles, while Infosys bucked the trend with a net increase of about 5,000 employees. Wipro also added staff, bringing its total above 240,000, with a continued focus on key skill areas. HCLTech and Tech Mahindra reported mixed or slight net declines.
Industry experts link this flattening of headcount growth to several structural forces at work, including the increasing use of AI tools, outcome-based delivery, and skill-focused hiring. Clients are moving towards productivity and outcome metrics rather than paying for manpower hours, and firms are prioritizing niche, AI-aligned capabilities over broad recruitment.
This shift has implications for the IT labor market. Demand remains for fresh talent and specialized skill sets, even if bulk hiring slows. Existing employees face greater pressure to upskill towards AI, data engineering, and platform roles. Firms may continue targeted hiring in areas like AI, cloud, and digital transformation rather than broad workforce expansion.
This trend is consistent and not confined to one quarter. Across the first nine months of FY26, top Indian IT companies added only a handful of net staff, underscoring cautious hiring practices and strategic realignment towards higher-value services. The sector is undergoing a deeper transformation in how IT services are built and delivered, with a focus on productivity gains, automation, and specialized skills. As a result, the traditional model of IT services delivery is being redefined, with a greater emphasis on technology-driven solutions and specialized talent.