Software majors delete 24,000 jobs across IT and engineering in a year

Synopsis

Over the last one year, Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro, Tech Mahindra and LTIMindtree collectively recorded 92,000 exits, in line with the industry's normal attrition rate of 11-15%. However, with exits outpacing hiring of new employees in the IT and engineering functions in five of the last six months, overall intake over the 12 months fell by 24,422 to 68,000, data from staffing firm Xpheno showed.

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Across India's top technology services companies, exits are outpacing new hires in the IT and engineering functions.

Over the last one year, Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro, Tech Mahindra and LTIMindtree collectively recorded 92,000 exits, in line with the industry's normal attrition rate of 11-15%. However, with exits outpacing hiring of new employees in the IT and engineering functions in five of the last six months, overall intake over the 12 months fell by 24,422 to 68,000, data from staffing firm Xpheno showed.

The combined headcount fell nearly 3% during this period to 797,722 in October 2026 from 822,144 in October 2025.

While IT functions typically involve maintaining and supporting existing technology systems, engineering functions focus on building and developing software and applications. Although these roles may overlap, their main objectives differ.

“The collective count of talent in these functions has gradually dropped,” said Francis Padamadan, chief executive of Xpheno. “Annual attrition has remained at 11-15%, but companies haven’t necessarily refilled attrited seats.”

Also Read: Jobless growth in IT: Revenue grows, headcount stagnates

Staffing firm TeamLease Digital said the decline reflects a combination of workforce optimisation and changing technology requirements, with artificial intelligence reducing the need for routine work in some traditional IT roles.

“Replacement hiring is currently lower than the number of people being laid off, particularly in the 5-12 years’ experience band across application maintenance, manual testing, infrastructure support and L1/L2 services,” said Neeti Sharma, chief executive of TeamLease Digital. “These are roles where AI is reducing the need for routine work.”

Experts say the squeeze on traditional roles is happening alongside demand for specialised technology skills. “AI, cloud, cybersecurity and specialised engineering roles are growing at around 16% year-on-year even as overall IT hiring has declined by 3%,” Sharma said.

The challenge is that people losing jobs in traditional roles may not have the skills required for these new opportunities, she said.

Xpheno’s Padamadan said the decline in headcount could also indicate that companies are upskilling employees to work with AI and deploying AI in their operations. “The combination of upskilling employees to be AI-ready/competent plus mainstream AI deployment for operations drives net drop,” he said.

He, however, cautioned against attributing the overall reduction entirely to AI-led changes in software development. “Conventional engineering demand remains in an active demand funnel,” Padamadan said, adding that companies are also facing challenges in key client markets and adjusting the mix of skills and roles they hire for.

Pareekh Jain, chief executive of market research firm EIIRTrend, said that in a weak-growth environment, companies are also trimming the number of employees not assigned to any client project, or bench talent.

“Last year, it was mostly bench optimisation. Companies reduced bench in a low-growth environment that led to a fall in headcount without impacting revenue,” Jain said.

The decline, he said, is a temporary phase. “Recovery in hiring would depend on when growth returns for the industry,” Jain said, adding that some service providers have started recruiting and reporting headcount additions.

For instance, in the September quarter, TCS added 4,258 employees, HCLTech added 6,450 and Tech Mahindra increased its headcount by 5,446, while Wipro cut 6,716 employees.
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