India's Top IT Firms Cut Nearly 7,000 Jobs in FY26 Amid AI Shift and Demand Uncertainty

India's major IT services companies have pulled back on hiring in FY26, marking a shift from the modest recovery seen a year earlier.

Combined, Tata Consultancy Services (TCS), Infosys, Wipro, HCLTech, and Tech Mahindra reported a net reduction of 6,981 employees in FY26. This stands in contrast to FY25, when these firms collectively added 12,718 workers.

TCS accounted for the largest decline, cutting 23,460 roles during the year, while Tech Mahindra reduced its workforce by 1,108 employees. In comparison, Infosys, Wipro, and HCLTech continued to hire, though at a measured pace, reflecting a more selective approach and stricter control over utilisation and margins.

Ongoing demand uncertainty, slower client decision-making, and increasing use of AI-driven efficiencies have all contributed to tighter headcount strategies.

Scale-driven growth to a skills-first model

Hiring has not fallen back to FY24 levels, but the overall trend still points to limited clarity on growth. Back then, the sector had seen a sharp contraction of over 69,000 jobs.

Analysts note a clear transition from scale-led expansion to efficiency-focused operations.

Recruitment priorities are also evolving. Companies are increasingly seeking AI-native professionals, problem solvers, and specialists in areas such as artificial intelligence, data, cloud computing, and cybersecurity.

This marks a departure from the traditional IT model, where revenue growth was closely linked to workforce expansion.

Industry headcount still edges higher

Despite the cautious stance among major firms, overall industry employment showed marginal growth. Total headcount rose by 1.4 lakh to reach 59 lakh in 2026, slightly above the 1.3 lakh increase recorded the previous year, according to Nasscom data.

However, the nature of hiring is changing. Demand is shifting towards domain-specific and industry-focused roles. Much of the incremental growth is being driven by global capability centres (GCCs), which have continued to expand their operations and mandates in India for the third consecutive year.

IT stocks decline

At the same time, Indian IT stocks faced renewed pressure. Shares of IT majors, including Infosys, TCS, HCLTech, and Tech Mahindra declined, dragging the BSE IT index down by about 5% on Friday.

This downturn followed a series of mixed earnings announcements. Analysts attributed the weakness to delays in project execution, revenue cannibalisation, and subdued forward guidance, among others.

Tech hiring activity slows further

Hiring trends remain subdued at the start of the new fiscal year. Active tech job openings stood at 110,000 in April 2026, down 8% from March, according to the latest Active Tech Jobs Outlook report by staffing firm Xpheno.

The IT services segment accounted for 43,000 of these roles, but this figure has declined 7% both month-on-month and year-on-year. The sector's share in overall tech hiring has also dipped below 50% for the first time since December 2025, settling at 49%, signalling continued strain in India's largest tech employment engine.