CHENNAI: Tata Consultancy Services (TCS), India’s largest IT services exporter, continued to trim its workforce in the December quarter, underlining the prolonged slowdown in global technology spending and a sharper focus on utilisation and productivity.
At the end of the three months to December, TCS had 582,163 employees, down from 593,314 at the end of the September quarter, according to the company’s latest disclosure. The fall of more than 11,000 employees in just one quarter marks the second straight period of contraction in the company’s headcount.
In the previous quarter, TCS had reported a net reduction of 19,755 employees, which had already taken its total workforce below the six-lakh mark for the first time in years. The latest numbers show that the retrenchment has continued, even as deal wins remain steady.
According to industry experts, the sustained fall in employee numbers reflects a deeper shift underway across the Indian IT industry. "After aggressive hiring during the post-pandemic digital boom, large IT firms are now recalibrating their workforce to match a more cautious demand environment, especially from clients in the United States and Europe.
TCS, which traditionally prides itself on stable hiring and low attrition, cutting headcount for two consecutive quarters is a clear indication that project ramp-ups are slowing and utilisation levels are being prioritised over fresh recruitment.
Rather than mass layoffs, the reduction appears to be driven largely by lower campus intake, natural attrition, tighter lateral hiring, and delayed onboarding of freshers. This allows the company to align its workforce more closely with actual project needs without triggering reputational or morale risks that come with large-scale layoffs.
From a financial perspective, lower headcount helps TCS protect margins at a time when pricing pressure is rising and discretionary tech spending remains under strain. Wage costs are one of the biggest components of IT services expenses, and keeping hiring in check provides a buffer against softer revenue growth.
At the same time, the company has been pushing automation, AI-driven delivery models and higher employee utilisation, enabling it to deliver projects with fewer people. This structural shift means that even when demand recovers, hiring may not return to the peaks seen during the 2021–22 boom.
Industry-wide trend
TCS is not alone. Most large Indian IT firms have slowed recruitment sharply over the past year as clients delay or scale back digital transformation projects. Fresh graduate hiring across the sector has been especially affected, with many companies deferring start dates and cutting intake targets.
The continued dip in TCS’s workforce suggests that a meaningful hiring recovery is unlikely until global tech spending shows a sustained rebound.
For now, the December quarter numbers reinforce the message that India’s IT sector remains in a cautious, cost-focused phase, prioritising efficiency over expansion as it navigates an uncertain global demand outlook, says an IT sector analyst.