Tech Industry Shakeup: Job Cuts at TCS Impact Big 5 IT Companies' Hiring
The IT sector is experiencing a significant shift, with India's top five IT companies facing a challenging landscape. In the first nine months of the 2025-26 financial year, these companies saw a net hiring total of just 17 employees, a stark contrast to the 17,764 net additions recorded in the same period last year. This dramatic change highlights the impact of AI-led delivery models on hiring practices.
The IT giants, including TCS, Infosys, Wipro, HCLTech, and Tech Mahindra, are reevaluating their strategies. TCS, in particular, has shed 25,816 employees, with a focus on cutting 2% of its workforce, over 12,000 employees, affecting mid-level and senior executives. This move reflects a broader trend of hiring restraint across the industry.
The net hiring numbers for the top five firms are concerning for students, indicating a cautious approach to hiring. This is further emphasized by the fact that some companies' recent acquisitions have boosted headcount, without which net additions would be even lower. The IT sector is witnessing a structural shift, with a fundamental move away from the traditional pyramid-led growth model.
Phil Fersht, CEO of HfS Research, highlights the pressure on discretionary spending, with clients focusing on existing assets and productivity. AI and automation are also impacting delivery metrics, reducing the need for incremental hiring, especially at junior and mid-level positions. This is evident in the decoupling between revenue and headcount growth.
TCS's decision to refrain from disclosing its campus hiring numbers this year is a sign of caution. The company is actively rebalancing its workforce, focusing on internal productivity, role consolidation, and utilisation rather than growth-led hiring. The IT sector's organic growth remains weak, with uneven demand recovery and subdued discretionary spending.
The industry is adapting to a new reality, where single-digit growth is becoming the norm. AI-first companies are leading the way, achieving over $100,000 in revenue per employee with around 25% digital labour. This trend is reshaping the services industry, creating a low-hire, low-fire environment. The challenge for IT companies is to navigate this changing landscape and adapt to the new demands of the market.
