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India’s top six IT services companies added only 3,847 employees in the April-June period of FY26—a sharp 72% drop from last quarter
Tech Job Blues.(Representative Image)
Hiring Slowdown Hits IT Sector: If net additions to payrolls are considered a key indicator of health in India’s $283-billion outsourcing industry, the June quarter has been far from reassuring. India’s top six IT services companies added only 3,847 employees in the April-June period of FY26—a sharp 72% drop from the 13,935 people they hired in the March quarter, as per their latest earnings disclosures.
Among them, only Tata Consultancy Services (TCS) and Infosys reported net headcount increases, adding 5,060 and 210 employees, respectively. In contrast, HCLTech, Wipro, Tech Mahindra, and LTIMindtree collectively reported a decline of 1,423 employees during the same period.
The slowdown comes at a time when revenue growth has also stagnated—typically a signal of reduced hiring needs. But analysts point out that artificial intelligence (AI) and automation are accelerating a structural shift in how tech work is delivered. “The current stagnancy in headcount additions potentially reflects a strategic recalibration. This shift is driven by the widespread adoption of AI, automation, and cloud-based architectures, which have significantly reshaped hiring trends across the IT industry,” said Milind Shah, managing director at Randstad Digital India.
Experts believe the traditionally people-driven sector is gradually breaking the linear link between revenue and workforce expansion, shifting focus instead toward productivity, strategic workforce planning, and innovation. Companies are increasingly upskilling internal talent rather than expanding headcount. “As conventional roles evolve, hiring has become more selective and aligned with core business objectives. Simultaneously, organisations are transforming workforce strategies by redeploying existing talent through upskilling programs and capability development rather than expanding workforce numbers,” Shah added.
Entry-Level Hiring Sees Sharp Decline
Hiring of fresh graduates—a long-time cornerstone of the Indian IT industry’s pyramid structure—has dropped by nearly 50% compared to pre-Covid levels, according to data from staffing firm TeamLease. “While early indicators for FY26 suggest a cautious rebound—with top IT firms projecting higher fresher intake linked to an increase in the number of projects coming to India—hiring will remain skill-driven and unlikely to return to earlier volumes,” said Neeti Sharma, CEO of TeamLease Digital.
Meanwhile, LTIMindtree president Venugopal Lambu told The Economic Times post-Q1FY26 results: “Over the last few quarters, when we added revenue, the headcount has not necessarily increased. So, there is a correlation or a non-linearity, but it is too early to call out to what extent it will happen.”
A Glimmer of Recovery?
Despite the weak Q1 data, the first half of 2025 (January–June) marked a net positive headcount movement for the first time in three years across the top six IT firms. In comparison, the first halves of calendar years 2024 and 2023 saw talent declines of 14,000 and 32,000, respectively. “This cohort of Tier-1 IT service players has had challenges with headcount additions since the latter half of CY2022, when the post-lockdown hyper hiring phase ended and sectoral headwinds hit hiring plans,” said Kamal Karanth, co-founder at recruitment firm Xpheno.
“As the cohort continues to tackle gradually rising attrition rates, a positive net headcount growth is a sign of a recovery in play.”
Still, Karanth cautioned that the trend remains nascent: “These are also early signs, and we will have to wait for the second half to see if the growth trajectory is sustained.”
While most firms have reaffirmed plans for fresher hiring in FY26, lateral hiring remains muted and will depend on macroeconomic factors and client spending sentiment. The industry continues to face headwinds from global uncertainties, pricing pressures, and delayed tech budgets.
As of June-end, the six major IT firms employed about 16.25 lakh people—still lower than the 16.58 lakh reported in June 2022.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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