Top 5 IT firms shed 2,500 jobs in Q3FY25 after a quarter of additions

Individually, only HCLTech and Infosys saw an increase in employee base in Q3, while TCS, Wipro, and Tech Mahindra lost employees.

India's top five information technology (IT) services companies — Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro, and Tech Mahindra — collectively saw their headcount decrease by 2,587 in the third quarter that ended on December 31, 2024 (Q3FY25). This is a seasonally weak period for the sector, marked by furloughs and tapered hiring.

The development is significant as Q2FY25 was a strong quarter in terms of hiring, wherein these companies together reported a net headcount addition of 15,033.

While IT companies did not go to campuses to hire freshers in the previous fiscal year, the sector has seen hiring of both freshers and lateral entries in the current fiscal. This indicates a revival in demand after at least two years of slowdown.

Only HCLTech and Infosys saw an increase in their employee base in Q3, while TCS, Wipro, and Tech Mahindra saw a reduction in the same.

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TCS lost around 5,370 employees after two consecutive quarters of growth. Interestingly, this occurred despite the company continuing to see strong deal momentum in Q3.

On a positive note, on a nine-month (9MFY25) basis these services exporters added 10,412 employees, marking a cautious revival after shedding over 57,608 employees during the same period last year.

Explaining their strategy, TCS CEO and MD K Krithivasan told Moneycontrol, “If you see quarter to quarter... We hired more  in Q1 and Q2 expecting a faster revival. We also knew that Q3 is going to be a seasonally weak quarter. So we try to  optimise by not hiring at the same rate or stop hiring for a quarter, and let the attrition run its course. Your headcount comes down because you also want to ensure that utilisation goes up, to control your margins.”

All five companies reported a sequential increase in their attrition levels on a last twelve-month (LTM) basis.

Speaking at the company’s Q3 post-earnings conference this week, Salil Parekh, CEO and MD, Infosys, said that while the company has seen the robust recruitment of over 5,000 employees in Q3, future plans will depend on an uptick in customers' discretionary spends and the impact of seasonality on revenue growth.

Meanwhile, Tech Mahindra, which is currently on track for business restructuring and revival under its new management, has been focussing on optimising capacity. The company reported a sequential decline of about 3,785 employees in Q3.

According to Wipro’s CHRO Saurabh Govil, the hiring plans of the company — which shed 1,157 employees in Q3 — are driven by demand and productivity. “We see this (drop in headcount) getting ironed out in the coming quarter. That was more of a seasonal thing because we purposely onboarded fewer freshers  in Q3 than what we will in Q4," he explained.

Fresher hiring

The hiring of freshers, as outlined by India’s IT sector in Q3FY25, is seeing a mix of cautious scaling back as well as expansion plans, which reflects a slightly positive demand outlook .

While Infosys and Wipro's FY26 hiring plans are similar to this fiscal's, HCLTech has somewhat scaled back its campus hiring plans.

India’s second-largest IT services exporter Infosys announced plans to onboard over 20,000 freshers in FY26, highlighting that the Bengaluru-based company is witnessing a recovery in discretionary spending.

“In terms of freshers, 15,000-plus for this year and 20,000 next year is what we are looking at at this point,” Chief Financial Officer Jayesh Sanghrajka said during the press conference post the Q3FY25 results.

The company added 5,591 employees in Q3FY25, marking its second consecutive quarter of headcount expansion after six quarters of slowdown.

Sanghrajka added that Infosys does not give an outlook for lateral hiring as it is dependent on multiple factors, such as demand and attrition. “Also, over the years we have moved to a very agile hiring model,” he added.

Also read: We hire more than half our freshers off-campus: Infosys CFO

Meanwhile, its cross-town rival Wipro plans to onboard 10,000-12,000 freshers in FY26. In FY25, it expects to hire around 10,000 freshers, with 7,000 already onboarded by Q3FY25.

During the post-earnings conference on January 17, Govil said that a cautious yet consistent hiring strategy will ensure that the company doesn’t sign up more than it can absorb. “We don't want to go overboard and make offers that we can't absorb. We have learned that lesson. We want to be cautious and consistent. That's our approach," Govil added.

On the other hand, HCLTech has revised its FY25 fresher hiring target to 7,000, down from the earlier guidance of 10,000.

The Noida-headquartered firm cited improved productivity and lower attrition rates for the downward revision.

Ramachandran Sundararajan, the company's Chief People Officer, said that 6,000 freshers had already been onboarded as of Q3FY25, with an additional 1,000 expected in Q4.