Indian IT Sector Faces Job Cuts Amid Changing Demand
The landscape of India’s IT industry is shifting, revealing a trend toward fewer employees as companies adapt to new needs and technologies. In FY26, the top five IT firms—TCS, Infosys, Wipro, HCLTech, and Tech Mahindra—saw a decrease of nearly 7,000 jobs. This marks a reversal from the previous year’s modest hiring increases.
This reduction is largely influenced by uncertainties in demand, delays in decision-making, and the efficiency brought by artificial intelligence (AI). As the sector focuses more on outcomes rather than just headcount, there’s a noticeable shift in hiring practices. Companies are now seeking problem solvers who can effectively collaborate with AI rather than simply filling traditional roles.
Among the five firms, TCS experienced the most significant cuts, reducing its workforce by over 23,000 employees. Tech Mahindra also made noticeable cuts, shedding around 1,100 jobs. While the industry is not facing the severe job losses witnessed in FY24, when more than 69,000 positions were eliminated, the current environment hints at cautious growth rather than robust recovery.
Hiring trends indicate a pivot towards talents skilled in AI, data, cloud solutions, and cybersecurity. Firms like Infosys, Wipro, and HCLTech are hiring selectively, focusing on specific skill sets while managing their margins closely. This hints at a structural shift in the industry.
Despite these job cuts, overall industry headcount has increased slightly, now totaling 5.9 million employees—an addition of about 135,000 over the past year. However, the hiring trend is favoring specialized roles driven by the expanding influence of global capability centers in India.
Industry experts note that while there is some slowdown in spending, the primary change is rooted in the growing impact of AI. Phil Fersht, CEO of an IT advisory firm, emphasized that clients are now looking for efficiency and productivity rather than sheer numbers of employees.
Infosys is responding to these changes by broadening its hiring practices. The company is now employing a diverse workforce with various skills aligned with AI and is forming engineering teams that work closely with clients to develop AI-led solutions more rapidly.
As firms focus more on experienced personnel who can leverage cutting-edge technologies, analysts predict that many businesses may see a significant rise in digital labor over the next two years. This shift might even increase revenue per employee substantially.
Overall, after a phase of aggressive hiring during the pandemic, the Indian IT sector is now reevaluating its workforce strategies in response to slower spending and increased automation.
