India’s IT hiring grows erratic in face of global uncertainties

Hiring patterns among leading IT companies show mixed patterns, indicating uncertainty and headwinds in the sector as global clients grow cautious of discretionary spending on IT services, especially in the US, their largest market. The change in attitude has nudged companies like Tata Consultancy Services (TCS), HCL Technologies, Tech Mahindra, Infosys and Wipro to focus on improving utilisation rates rather than growing employee numbers.

“The erratic net headcount additions in IT companies can be attributed primarily to a combination of a global economic slowdown and a strategic shift in the industry’s operational model. As global clients have become more cautious with discretionary spending, companies have focused on improving margins and utilisation rates rather than expanding their workforce,” said Biswajeet Mahapatra, Principal Aanalyst, Forrester.

He noted that companies favoured specialised skills in AI, machine learning and cybersecurity that reduced the overall workforce for some major firms.

According to Greyhound Sector Pulse 2025, 13 per cent of global CIOs surveyed confirmed full greenlighting of digital transformation budgets for FY25, triggering deferred hiring cycles across vendors.

“The ambiguity has pushed companies away from forecast-driven bulk hiring to real-time, quarter-by-quarter intake. In India alone, top five IT services firms added only 12,718 employees in FY25—following a net loss of over 70,000 the previous fiscal. This stop-start approach is now the industry norm,” said Sanchit Vir Gogia, Chief Analyst and CEO, Greyhound Research.

Gogia said that workforce agility—bench reallocation in under 10 days—is emerging as the new metric of hiring maturity.

Offers to be honoured

At TCS, Milind Lakkad, Chief Human Resource Officer, said the company honoured all job offers and said it will do so for the rest of the year as well.

“Lateral hiring will be recalibrated based on the demand outlook. The LTM attrition in IT services was at 13.8 per cent, up 50 bps sequentially,” said Lakkad. It may be mentioned here that IT employees union Nascent Information Technology Employees Senate (NITES) recently wrote to the Labour Ministry regarding delayed hiring of over 600 lateral hires by TCS. The company responded stating that all offers will be honoured with joining dates decided as per business demand.

When asked about excess capacity, Samir Seksaria, Chief Financial Officer, TCS, said the company added people in anticipation of its service plans for Q1. However, through Q1 there was a contraction in demand owing to macroeconomic headwinds. Nuvama Research noted attrition and retention dynamics as one of the key risks for TCS investors.

Reworking compensation

HCL Tech reindexed its compensation plans for freshers. For the regular cadre, the base compensation is ₹4.25 lakh in the India context, the specialist or elite category gets three times higher the base compensation on the services side and on the software side, it’s upwards of four times the base compensation.

Greyhound Research said the salary revisions for FY26 are not about retention but margin protection. Internal approvals are guided by delivery profitability and attrition hotspots, it said.

“TCS, historically consistent with its appraisal cycle, has deferred 2025 hikes pending H2 revenue recovery. Infosys has issued partial raises in tranches. HCL Tech and others are using bonuses and variable pay over fixed hikes. The result is workforce discontent. Unless wage strategy aligns with performance transparency, disengagement will persist,” said Gogia.

Like with TCS, HCLTech also built capacity for specialised skills in anticipation of a large deal that is now taking time to ramp up. The decline in automotive for the last three quarters or so also released some capacity, said officials.

“We are continuing to see non-linearity in our business — like revenue growth and people count growth. We saw that significantly play out in FY25 and even in Q1, the year-on-year (y-o-y) revenue growth versus y-o-y people count that there is a decoupling,” said C. Vijaykumar, CEO at HCL Tech.

TechM to hire more

Tech Mahindra confirmed it will hire more as it progresses in the year. In Q1, the company hired 250 freshers, which is marginal given the demand scenario. While Tech Mahindra said it sees the worforce as a great source of strength, it will reshape the pyramid over a period of time.

“I am hopeful that when the industry comes back to some semblance of normal growth, that absorption capability will be significantly increased. But candidly, the dramatic reshaping of the pyramid is not an FY27 exercise, there will probably be a longer-term exercise in really reshaping the pyramid,” said Joshi, adding that Tech Mahindra will never match its peers in terms of the pyramid.

Fresher hiring

Infosys said it has a plan for recruitment from colleges and lateral hires. While it acknowledged the flat headcount in Q1, it said it will continue with its target of onboarding 15,000-20,000 freshers this year. Voluntary attrition for Q1 stood at 14.4 per cent. The company’s rising subcontracting cost and cross-currency headwinds may impact operating margins negatively, said Axis Securities in its post-result report.

Meanwhile, Wipro said it will continue to invest in utilisation “for a little bit more,” but freshers hiring, rotation, pyramid optimisation will become easier as the company wins more programmes. With attrition rate at 15 per cent, Nuvama said the same is a key risk for investors as the same may impact Wipro’s ability to sustain margins and profitability.

On attrition, Mahapatra said attrition is likely to remain stable or increase marginally in the coming quarters. While voluntary attrition had previously moderated due to a focus on job stability amidst a muted hiring environment, some reports indicate a slight uptick.

“The uptick is partly due to a renewed push by employees for better opportunities and pay, particularly from global capability centres (GCCs) and product companies that are actively hiring for specialised skills,” said Mahapatra, adding that the overall market remains cautious with many companies implementing advanced retention programmes and focusing on internal growth to keep their skilled workforce.

Published on July 24, 2025