Indian IT Sector’s Hiring Outlook for FY26

The Indian IT sector, a cornerstone of the country’s economy, is poised for a significant shift in hiring practices as it looks ahead to fiscal year 2026. Despite facing challenges in the current fiscal year, major players in the industry are setting ambitious recruitment targets. Companies like Tata Consultancy Services (TCS) and Infosys are optimistic about renewed technology investments, which they believe will drive growth and job creation. This article explores the current state of the IT sector, the hiring goals for the upcoming fiscal year, and the factors influencing these changes.
Current Employment Trends in the IT Sector
The Indian IT sector, valued at approximately $254 billion, has faced a tumultuous period marked by a significant reduction in workforce. In fiscal year 2024, the sector saw a loss of over 70,000 jobs as companies adjusted to decreased technology spending amid a global economic slowdown. The third quarter of the current fiscal year highlighted this trend, with a collective workforce reduction of 225 employees among the largest IT firms. This followed a brief period of positive recruitment figures in the second quarter, which ended a seven-quarter stagnation.
Despite these challenges, the outlook for the IT sector is beginning to brighten. Companies are reporting signs of recovery, particularly in the banking, financial services, and insurance (BFSI) sectors. Increased discretionary technology spending in North America during the traditionally slow third quarter has sparked optimism among IT firms. As a result, many companies are cautiously optimistic about their hiring prospects for the upcoming fiscal year.
Ambitious Hiring Goals for FY26
Looking ahead to fiscal year 2026, major IT firms are setting ambitious hiring targets. Tata Consultancy Services (TCS) plans to recruit over 40,000 fresh graduates, significantly exceeding its typical recruitment numbers. Infosys, a key competitor, aims to hire more than 20,000 freshers, up from its commitment of over 15,000 for FY25. Wipro, despite falling short of its previous hiring goals, has announced plans to recruit between 10,000 and 12,000 new graduates in FY26.
These targets reflect a broader trend within the industry. Companies are responding to renewed confidence in technology investments and a gradual recovery in demand. Infosys CEO Salil Parekh noted that the expansion in recruitment aligns with the revival in discretionary spending, although it remains subject to seasonal revenue fluctuations. The positive performance of firms like Infosys, which reported a 7.6% year-on-year revenue growth in the December quarter, further supports this optimistic outlook.
Factors Influencing Recruitment Strategies
Several factors are shaping the recruitment strategies of IT firms as they navigate the post-pandemic landscape. Enhanced productivity and reduced attrition rates have prompted companies like HCLTech to adjust their hiring targets. HCLTech has lowered its FY25 fresher recruitment goal from 10,000 to 7,000 but anticipates higher hiring numbers for FY26. The company emphasizes a focus on specialized hiring to meet evolving market demands.
Additionally, the recent financial earnings reports indicate a mixed picture for workforce growth. While some firms have added personnel, others have implemented cost-cutting measures. TCS, for instance, recorded a significant reduction of 5,370 employees in the December quarter. However, these reductions are viewed as seasonal adjustments rather than indicators of long-term demand trends. Companies are leveraging advancements in generative artificial intelligence (GenAI) to improve productivity while managing costs.
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