India’s six major IT services companies recorded a combined decline of 24,422 employees in their IT and engineering functions over the year to October 2026, as departures outpaced recruitment. The companies—Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro, Tech Mahindra and LTIMindtree—had a combined headcount of 797,722 in October 2026, down from 822,144 a year earlier, according to staffing firm Xpheno data reported by The Economic Times.
The decline highlights a shift in how large technology companies manage their workforces. Instead of automatically replacing every employee who leaves, companies are controlling recruitment, restructuring teams and increasingly using artificial intelligence (AI) to improve productivity. Although routine IT services roles face pressure, demand for specialised skills in AI, cloud computing, cybersecurity and engineering continues to grow. The figures represent a net reduction in headcount, not evidence that every missing position resulted from a direct layoff.
Key Takeaways
- Six major Indian IT companies recorded a combined headcount decline of 24,422 over the year to October 2026.
- Their combined workforce fell nearly 3%, from 822,144 to 797,722.
- The companies recorded approximately 92,000 employee exits during the period.
- Recruitment failed to replace all departing employees, with exits exceeding new hiring in five of the previous six months.
- AI adoption, workforce optimisation, weak client demand and tighter cost controls are contributing to hiring changes.
- Routine application maintenance, manual testing and infrastructure-support roles face pressure.
- AI, cloud, cybersecurity and specialised engineering skills continue to attract demand.
Which IT Companies Are Affected?
The reported decline covers six of India’s largest IT services companies: TCS, Infosys, HCLTech, Wipro, Tech Mahindra and LTIMindtree.
These companies provide software development, consulting, application maintenance, engineering services and technology support to clients across industries. Their workforce strategies influence hiring opportunities for experienced professionals, fresh graduates and technology specialists throughout India.
| Workforce indicator | October 2025 | October 2026 | Change |
|---|---|---|---|
| Combined IT and engineering headcount | 822,144 | 797,722 | -24,422 |
| Percentage change | — | — | Nearly -3% |
| Employee exits over the year | — | Approximately 92,000 | Gross exits |
| Hiring pattern | — | Exits exceeded hiring in 5 of 6 months | Net workforce decline |
Source: Xpheno data reported by The Economic Times. Figures refer to the IT and engineering functions covered by the report and should not be interpreted as the total workforce of every company.
The distinction between gross exits and net headcount change is important. Approximately 92,000 employees left the companies during the period, but many were replaced through recruitment. The net reduction of 24,422 reflects the difference between the employees leaving and the number added to the workforce.
The data therefore points to a combination of departures, selective recruitment and workforce restructuring rather than 24,422 confirmed individual layoff announcements.
Why Are IT Companies Reducing Their Workforce?
Several factors are influencing workforce decisions across India’s technology services industry.
1. AI is changing traditional IT work
AI tools can assist with software development, code generation, testing, documentation and troubleshooting. In some situations, automation allows teams to complete work with fewer manual steps or less time.
This is particularly relevant to repetitive and standardised activities. Companies can use AI to improve productivity while reallocating employees to more complex assignments.
However, the overall employment impact is not determined by technology alone. It also depends on client demand, project growth, the types of services companies sell and how quickly new business offsets productivity gains.
2. Companies are controlling costs
IT services firms often employ large teams to deliver long-term client projects. When customers delay projects or reduce discretionary spending, service providers may have excess capacity or employees who are not assigned to billable work.
Companies can respond by reducing recruitment, redeploying employees, retraining staff or reducing the number of positions that remain unfilled after departures.
Market research firm EIIRTrend’s chief executive, Pareekh Jain, told The Economic Times that companies had been reducing bench strength in a relatively weak-growth environment. Bench employees are workers who are not currently assigned to a client project.
3. Employee departures are not being fully replaced
Annual attrition at the six companies remained within an estimated 11%–15% range, according to Xpheno’s data cited in the report.
The more important change is that companies are no longer replacing every departing employee on a one-for-one basis. Some responsibilities are being redistributed, some roles are being automated, and recruitment is increasingly targeted at specific skills.
This approach can lower total headcount even when companies continue hiring in selected departments.
Which IT Jobs Face the Greatest Pressure?
The workforce adjustment is not affecting every technology role equally.
TeamLease Digital chief executive Neeti Sharma told The Economic Times that replacement hiring was lower than departures, particularly among professionals with five to 12 years of experience in certain traditional IT functions.
Roles involving application maintenance, manual software testing, infrastructure support and Level 1 and Level 2 technical services face pressure where tasks can be standardised or automated.
| Job category | Current trend | What it means for workers |
|---|---|---|
| Application maintenance | Under pressure in some routine functions | Learn automation and modern software tools |
| Manual testing | Repetitive tasks increasingly automated | Build skills in test automation and quality engineering |
| L1/L2 technical support | Standard queries can be handled by AI tools | Develop troubleshooting and systems expertise |
| AI and machine learning | Demand remains strong | Build practical AI and data capabilities |
| Cloud computing | Specialised skills remain valuable | Learn cloud architecture, deployment and operations |
| Cybersecurity | Demand for expertise continues | Develop security, risk assessment and incident-response skills |
| Software and engineering | Demand varies by specialisation | Strengthen problem-solving and development skills |
These trends do not mean that every worker in a traditional role will lose their job. Professionals who combine domain knowledge with automation, cloud, security or AI capabilities may be able to move into new responsibilities.
AI Hiring Is Growing Even as Overall IT Recruitment Slows
The contraction in traditional IT and engineering headcount is occurring alongside demand for emerging technology skills.
TeamLease Digital estimated that hiring for AI, cloud, cybersecurity and specialised engineering roles was growing at around 16% year-on-year, even as overall IT hiring declined by 3%, according to the report.
Separately, Reuters reported in July 2026 that AI-related hiring in India’s IT sector had increased 16% year-on-year in June, while overall IT recruitment fell 3%.
These figures suggest that the market is changing in composition. Companies may recruit fewer people for routine work while increasing investment in professionals who can implement AI systems, secure digital infrastructure and deliver specialised technology projects.
Nevertheless, growth in a particular skill category does not guarantee employment for every candidate. Employers still assess practical experience, problem-solving ability, communication skills and the ability to deliver useful business outcomes.
Hiring Is Not Declining at Every Company
The workforce figures also conceal differences between individual companies and reporting periods.
During the September quarter of 2026, TCS added 4,258 employees, HCLTech added 6,450 and Tech Mahindra increased its headcount by 5,446. Wipro, in contrast, reduced its headcount by 6,716 during the same quarter, according to The Economic Times.
These quarterly changes show that a company can add employees in one period while its workforce declines over a longer timeframe. Hiring patterns depend on new contracts, project demand, employee departures and restructuring decisions.
The figures also caution against interpreting the combined reduction as evidence that every major IT company is following an identical employment strategy.
What This Means for Freshers and Experienced Professionals
For fresh graduates, the changing hiring environment means that a degree alone may not be enough to stand out. Employers are increasingly looking for candidates who can demonstrate practical skills through projects, internships, technical assessments and problem-solving exercises.
For experienced professionals, the challenge is to keep skills relevant as routine tasks become more automated. Learning AI-assisted development, cloud platforms, test automation, cybersecurity or data engineering may improve access to roles that are expanding.
Workers do not need to learn every new technology. A more practical strategy is to build strong fundamentals in one area, understand how AI tools can support that work and create projects that demonstrate real capability.
The Bigger Picture
India’s IT services industry is moving away from a model in which revenue growth is closely associated with continuously expanding headcount. AI-enabled productivity, changing client expectations and tighter cost controls are encouraging companies to focus more on skills, output and profitability than on the size of their workforce alone.
That transition creates risks for workers whose responsibilities consist mainly of repetitive tasks, but it also creates opportunities in specialised technology roles. The overall employment outcome will depend on whether new business, emerging technology services and demand from global capability centres generate enough opportunities to offset slower recruitment at traditional IT services firms.
FAQs
1. Why have India’s major IT companies lost 24,000 jobs?
Their combined IT and engineering headcount fell by 24,422 over the year to October 2026 because employee departures outpaced recruitment. AI adoption, cost controls, weak client demand and workforce optimisation are among the contributing factors.
2. Which companies are included in the report?
The six companies are TCS, Infosys, HCLTech, Wipro, Tech Mahindra and LTIMindtree.
3. Does the 24,000 decline mean all those employees were laid off?
No. The figure is a net headcount reduction. The companies recorded around 92,000 exits during the year, but recruitment replaced some departing employees. The net decline reflects the difference between departures and additions.
4. Which technology skills are in demand?
AI, cloud computing, cybersecurity and specialised engineering skills continue to attract demand. Test automation, data engineering and AI-assisted software development can also help professionals adapt to changing requirements.
5. Should freshers avoid IT careers because of layoffs?
Not necessarily. The industry continues to recruit, but opportunities are becoming more selective. Freshers can improve their prospects by learning programming fundamentals, building practical projects and developing expertise in a relevant technology area.
Looking Ahead
India’s major IT services companies are likely to continue balancing recruitment with automation, client demand and operating efficiency. The key indicators to watch include quarterly headcount changes, fresher hiring, attrition, demand for specialised skills and the contribution of AI-related services to revenue growth. The net employment impact will depend on how quickly companies generate new business and redeploy workers as technology changes.
For job seekers, the practical response is to focus on adaptable skills rather than assuming that either traditional IT jobs or AI-related roles are guaranteed. Strong fundamentals, real project experience, communication and the ability to use modern tools effectively can help candidates compete in a market where employers are becoming more selective about the roles they fill.
Get the day’s top stories in your inbox
One concise email. No spam, unsubscribe anytime.
