India’s IT services companies are increasingly moving away from traditional manpower-led billing models and positioning themselves around artificial intelligence (AI)-led automation and outcome-based delivery.
While companies continued to report strong deal pipelines and AI demand, several executives across large and mid-tier firms indicated that clients were now focusing more on productivity, workflow automation and business outcomes rather than linear expansion of engineering teams.
The shift was visible in how companies described their AI strategies, delivery models and client conversations during earnings calls and analyst interactions.
Coforge Chief Executive Officer (CEO) Sudhir Singh said the industry was moving from “a world of IT delivery to one of business orchestration”.
“In our industry, labour as a default has been disrupted, and that is being replaced by AI-native process redesign and by domain-specialised agents,” Singh said during the company’s FY26 press interaction.
He added that “firms that continue to bill hours are getting left behind”.
Mphasis also pointed to a broader change in how enterprises were deploying AI. CEO Nitin Rakesh said clients were increasingly focused on “operationalising AI”, “automating end-to-end workflows” and using technology to “reduce unit costs”.
“AI, data, and technology platforms are no longer viewed as standalone initiatives - they are becoming the foundation of enterprise transformation,” Rakesh said during the company’s earnings call.
The company also said enterprises were moving beyond isolated AI use cases towards embedding intelligence across operations, decision-making and business workflows.
Infosys, meanwhile, highlighted AI-led legacy modernisation work during the quarter. The company said it used AI foundation models to migrate three million lines of COBOL code for Hertz, helping reduce cost and timelines by 60%.
HCLTech said client behaviour during the quarter reflected “cost-takeout initiatives coupled with accelerated adoption of AI-led productivity gains”. CEO C Vijayakumar also said the company was seeing “AI deflation” in bookings, indicating that productivity gains from AI were beginning to affect the scale and structure of technology contracts.
Several companies also linked AI adoption with internal restructuring and operational efficiency.
Coforge said it had “automated and AI-enabled” backend operations and reshaped delivery structures, which the company said had “structurally reset” its margin profile for FY27 and beyond.
Mphasis said enterprises were increasingly seeking “platform-led execution that simplifies and shrinks the core”.
Brokerages and industry analysts have also started flagging AI-led pricing pressure across the sector. Kotak Institutional Equities said in a recent report that “AI-driven deflation is becoming a reality”, adding that clients were increasingly demanding that productivity gains from AI be reflected in pricing during contract renewals. The brokerage estimated a 3-3.5% revenue impact for the Indian IT services industry over the next two fiscal years due to AI-led automation and pricing resets.
Jefferies also said AI could weigh on sector revenue growth over the next one to two years as “deflation in legacy service-line revenues” may outweigh gains from newer AI-related work during the transition period.
The shift is also beginning to affect hiring patterns across the sector. India’s top five IT services companies, Tata Consultancy Services (TCS), Infosys, Wipro, HCLTech and Tech Mahindra together reduced their workforce by nearly 7,000 employees in FY26, reversing the modest hiring recovery seen a year earlier.
Analysts said the traditional model, where revenue growth was closely linked to headcount expansion, was beginning to weaken as AI improves productivity and automation.