Significant Decline: Exploring the Reduction of 75,000 Employees in TCS, Infosys, Wipro, and Other IT Companies
Indian IT giants, including Tata Consultancy Services (TCS), Wipro, Infosys, HCL Tech, and Tech Mahindra, have experienced a significant reduction in their bench strength over the past two years, with a decline of approximately 25%. This decrease, amounting to around 75,000 employees, has raised concerns among industry experts about the future of workforce management in the sector. The traditional model of maintaining a reserve workforce to cushion against demand fluctuations is evolving, and many believe that the current levels may not return even if growth resumes.
Shifting Trends in IT Sector Bench Strength
Historically, IT companies maintained a substantial bench by hiring in anticipation of future projects, ensuring that skilled personnel were available when demand surged. However, this practice is changing as firms tighten their workforce utilization. Companies that previously operated with 4-5% of employees on the bench are now aiming for much lower levels, often between 1% and 1.5%. For instance, TCS has implemented a policy that caps bench duration at around 35 days annually, after which performance evaluations are conducted, and unallocated employees may be asked to leave.
Experts suggest that this shift is indicative of a deeper structural change rather than a temporary trend. Gaurav Vasu, founder of UnearthInsight, noted that the traditional concept of a bench is becoming less relevant unless firms can accurately predict skill or role-based demand with high precision. The current contraction in bench strength is primarily attributed to slower industry growth rather than technological disruptions. Pareekh Jain, CEO of EIIRTrend, emphasized that local hiring has increased significantly over the past five to six years, which may reduce the need for companies to rebuild their bench when growth returns.
Changing Hiring Patterns and Skill Demand
The hiring landscape in the IT sector has shifted dramatically over the last two years. Demand for traditional mid-level delivery roles has decreased by approximately 20-30%, while the need for skills in artificial intelligence, generative AI, data, and cloud technologies has surged by about 30-40%. Neeti Sharma, CEO of TeamLease Digital, highlighted that global capability centers are witnessing varied trends, with mid-level recruitment showing greater resilience. Leadership hiring has also increased, with the share of such roles rising from around 15% in 2024 to approximately 20% in 2025.
The nature of job roles is evolving, with more than 50% of current job demand driven by emerging skills, particularly in AI, cloud, and platform engineering. Conversely, entry-level hiring has seen a decline of around 30-35%. Additionally, the time required to place benched engineers with 8-12 years of experience has lengthened significantly, now taking 60-90 days compared to the previous 30-45 days.
Salary Dynamics in the Evolving IT Landscape
Compensation trends within the IT sector are also undergoing changes. Premiums for lateral hiring in non-AI roles have decreased to 10-20%, down from 25-35% in the fiscal year 2022-23. In contrast, professionals with AI expertise continue to command higher premiums, ranging from 20-30%, and tend to receive job offers more swiftly. According to data from Quess, premiums for generative AI roles can vary between 15-40%, depending on the specific position.
The overall career structure within IT services firms is evolving as well. While the role of people managers is not disappearing, their responsibilities are shifting towards revenue expansion and profitability management, moving away from traditional headcount oversight. This evolution reflects the changing priorities and demands of the IT industry as it adapts to new market realities.
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