TCS, HCLTech Cut Staff in Q3 Amid Restructuring, Efficiency Drive
Overview
Tata Consultancy Services and HCL Technologies reduced their workforce in the December quarter. TCS shed 11,151 employees due to restructuring and attrition, while HCLTech saw a marginal decrease of 261. This reflects a shift towards efficiency and outcome-led delivery models, decoupling revenue from headcount growth. Both firms continue to focus on AI skilling and selective fresher hiring.
Stocks Mentioned
Tata Consultancy Services and HCL Technologies reported a sequential decline in headcount in the December quarter, signaling a recalibration of workforce structures across India's major IT services firms. TCS's global employee count dropped by 11,151 to 582,163, while HCL Technologies saw a reduction of 261 employees during the period.
Headcount Declines Reflect Strategic Shifts
The decrease in workforce figures accompanies reported constant currency revenue growth, highlighting an increasing decoupling of headcount and revenue growth for IT firms. This evolution points towards delivery models shifting from traditional headcount-based billing to more efficiency and outcome-led approaches.
Restructuring and Attrition Drive TCS Reductions
At TCS, management cited a combination of restructuring-led exits and ongoing voluntary attrition for the headcount decline. Chief Human Resources Officer Sudeep Kunnumal stated that the company continues its previously announced restructuring exercise, supporting employees into new roles where possible and releasing those for whom future roles are not identified. The company released approximately 1,800 employees as part of this process, emphasizing it was a procedural step rather than a numerical target. TCS's last twelve months voluntary attrition stood at 13.5% at the quarter's end, up 20 basis points sequentially.
HCLTech Sees Improved Attrition, Higher Fresher Hiring
HCL Technologies, conversely, reported an improvement in attrition trends, with its last twelve months attrition declining to 12.4%. The company added 2,852 freshers during the quarter, a notable increase from the previous period. HCL Technologies also outlined a differentiated campus recruitment strategy, aiming for an elite cadre of entry-level employees who could command salaries between ₹18 lakh and ₹22 lakh annually, significantly higher than the normal fresher band.
Focus on AI and Next-Gen Talent
Both firms underscored the growing importance of AI-led skilling. TCS highlighted significant investments in building a high-performance workforce with future-ready skills, with employees acquiring 3.8 million competencies year-to-date and over 217,000 employees possessing higher-order AI skills. The company is actively hiring AI-native fresh graduates, integrating Gen AI into its training programs. HCLTech echoed similar priorities, stressing the increasing importance of data skills and aligning workforce shifts with customer service delivery.
