AI reshapes workforce as IT firms shift to high-tech talent

DAYS AFTER posting a third straight quarter of decline in revenues, Tata Consultancy Services (TCS) announced in early August that it would reduce its workforce by 2% to “future-proof” the company. This means that nearly 12,000 middle- and senior-level executives will be rendered jobless by the end of FY26 at India’s largest IT services firm with a headcount of around 613,000 employees. The move, a harbinger of what lies ahead, has jolted the sector.

Back in 2022, technology adoption accelerated globally, due to the pandemic. And IT firms responded with a hiring spree. India’s Top 3 IT firms recruited more than 70,000 people in FY21. But hiring as well as attrition rates have moderated over the past couple of years. The headcount at TCS rose from 606,331 in Q1FY23 to 613,069 in Q1FY26, while at HCLTech it inched up from 210,966 to 223,151. Attrition, however, dropped from 19.7% to 13.8% at TCS and from 23.8% to 12.8% at HCLTech. Infosys saw its workforce decline from 335,186 to 323,788 over the same period.