New Delhi, Jan. 15 -- India's top IT services firms - Tata Consultancy Services (TCS), Infosys and HCL Technologies (HCLTech) - adopted a cautious workforce strategy in the third quarter of fiscal 2026 (Q3'26) from October to December 2025, with a focus on selective hiring and strategic realignment rather than broad headcount expansion. Recent earnings calls and regulatory disclosures reveal how managements are navigating tepid demand, rising costs from regulatory changes and evolving client priorities.
At TCS, the largest IT exporter by revenue, headcount fell by over 11,000 employees during Q3 FY26, continuing a multi-quarter decline in workforce numbers. The company attributed this to ongoing restructuring and talent realignment amid subdued demand for discretionary IT services. According to the company's earnings commentary, TCS continues to hire selectively from both the lateral market and campuses, even as it rationalises roles where deployment in future projects is not viable.
The company said during the earnings call: "We continue to hire and seek top talent from both the lateral market and the campuses. Where we are not finding success. we are releasing [employees]. We expect this exercise to continue into the next quarter as well."
TCS Vice President Sudeep Kunnumal emphasised that there was no predetermined layoff number, and that releases were tied to deployment viability: "We said we'll continue this exercise till the end of this year. We release people only upon review if there is a genuine reason."
On attrition, TCS reported a voluntary last-twelve-months attrition rate of 13.5% in IT services, indicating moderate churn even as overall headcount shrinks.
Infosys, meanwhile, bucked the broader trend with net workforce additions of just over 5,000 employees in Q3, taking its total headcount to around 337,000. The company also reported an easing in attrition, with voluntary turnover dipping to about 12.3%.
Infosys CEO Salil Parekh told investors, "I think it demonstrates that we have confidence in where the market is, what we are seeing in terms of demand." He reiterated the company's commitment to campus hiring, adding, "We are going to hire on campus. We will continue in that sort of range for next year, because of the new areas of demand."
The hiring expansion came even as quarterly profit dipped due to the impact of India's new labour codes - a regulatory shift that has also led to higher employee costs.
India's third-largest IT services firm, HCL Technologies, adopted a more guarded stance, reporting a slight net decline in headcount and a significant 45% drop in fresher hiring sequentially. Attrition remained stable at about 12.4%. While HCLTech's earnings disclosures did not include detailed executive quotes on hiring, the company's earnings filings highlighted its focus on advanced AI services and prioritised talent alignment to reinforce high-growth areas.
Industry-wide commentary reflects this broader caution. Quess Corp CEO Guruprasad Srinivasan told PTI that IT hiring has been nearly flat for the past six to seven quarters, with limited signs of a broad rebound yet - a dynamic tied to global demand uncertainty and the shift toward specialised digital skills.
Recruitment firm CIEL HR's Sanketh Chengappa KG noted that global trade uncertainties and rising AI adoption have prompted companies to adopt a "measured approach" to workforce expansion, prioritising efficiency and skill alignment over broad headcount growth.
Broader staffing data also points to a more nuanced picture: while traditional IT services hiring remains subdued, growth in Global Capability Centres (GCCs) and digital transformation roles continues, as employers seek niche expertise rather than volume. Reports suggest tech job openings remain below pre-pandemic levels in overall volume, even as some sectors show pockets of resilience.
Attrition trends across the sector are stabilising, with most large players reporting turnover in the low-to-mid teens - down from the elevated peaks seen in the post-pandemic talent war, but still above pre-COVID norms. Analysts see this as a sign that more disciplined workforce planning and tighter deployment strategies are taking hold.
While several other IT providers are yet to disclose their hiring plans in the next few days, according to analysts, as FY26 progresses, hiring at India's IT majors is likely to remain disciplined, with a focus on specialised digital, cloud and AI skill sets over broad recruitment. That said, the companies are striking a balance between targeted hiring in high-growth segments and tighter workforce optimisation, as decisions increasingly hinge on deal pipelines, regulatory costs and evolving customer needs.
Published by HT Digital Content Services with permission from TechCircle.