Software Majors Add More Hands in Q2 on Deal Wins, Growth Optimism

Five out of the top six Indian technology companies sequentially doubled job additions in the September quarter to 10,300, overcoming concerns that artificial intelligence (AI) would shrink employment in the country's most globally tracked industry through automation and an inevitable revenue squeeze.

In the $315-billion industry, with a combined 7.52% weighting on the Nifty as of end-September, Wipro was the only company to shed jobs, reducing its headcount by 6,700.

Data showed the top six had added a net 5,500 to their rolls in the April-June quarter.

Employee data of Infosys, the country's second-largest software exporter, isn't included in these calculations as the company is due to announce earnings on October 23 and hasn't shared its latest manpower data.

Excluding Wipro's reductions, Tata Consultancy Services (TCS), HCLTech, Tech Mahindra and LTM (formerly LTIMindtree) added a massive 17,100 employees in the second quarter.

Praveen Bhadada, CEO and managing director, Neovay Global, attributed the hiring improvement to the transition of past deal wins into delivery, coupled with higher utilisation.

"The new work can't be absorbed by existing teams alone...The fresher pipeline has restarted along with specialised roles like forward deployed engineers and AIOps (Artificial Intelligence for IT Operations)." Bhadada said.

Between April and June, the six companies had added around 5,500, largely led by the biggest IT services provider TCS's additions of nearly 9,300 employees alongside Wipro being the only other company to increase headcount (by 888). The remaining four companies had reduced the number of people on its payrolls by 4,651.

'Book to Bill'

The reversal in employee count in FY27 (the last quarter of FY26 recorded a drop of 7,100 people), with a sharp rise in the September quarter, signals a shift from higher utilisation and restructuring of engineering talent over the past several quarters. The talent pyramid is now being reset amid a gradual waning of AI-led revenue deflation and translation of deal wins into revenue-yielding delivery engagements.

Industry experts believe software services exporters are into calculated hiring to meet existing and fresh delivery requirements as there is renewed confidence in business demand with fewer uncertainties around AI and focus on newer growth opportunities.

"As we build future capacity and navigate demand transitions, we have invested in a higher bench and increased hiring of subcontractors to meet near-term skills and delivery requirements," Samir Seksaria, chief financial officer, TCS, told analysts in a conference call after earnings.

In the September quarter, the Tata group firm added 4,258 employees to its base in Q2FY27 while HCLTech grew its headcount by 6,450, its highest quarterly addition in 16 quarters.

Both TCS and HCLTech reported stable revenue growth. TCS recorded a 2.8% YoY rise and flat sequential growth at $7.6 billion, while HCLTech's revenue rose 2.3% quarter-on-quarter (QoQ) and 2.6% YoY to $3.7 billion.

TCS reported a marginal sequential rise in deal wins at $9.5 billion with AI revenues crossing $3 billion, while HCLTech saw its second-highest quarterly deal bookings with a spike of 35.5% in new bookings at $3.25 billion and advanced AI revenue higher by 28%.

Along similar lines, Mahindra Group's IT subsidiary Tech Mahindra, the fifth largest player with a relatively smaller sized quarterly revenue base of $1.7 billion, saw a jump in its employee base by 5,446, marking its largest quarterly increase in two years and first quarterly headcount addition in four quarters. Its immediate rival LTM, the sixth largest in the pecking order, on Friday reported a smaller increase of 949 in its new employees from the June quarter and a higher addition of 2388 from a year ago.

Even Persistent Systems, the only IT firm to have announced the numbers so far, added 958 employees from the previous quarter and a sharp intake of 3374 employees from a year ago.

Cautious Optimism

To be sure, companies are still circumspect. "I don't want to conclude by saying that the deflation part is complete, but I think there are a number of opportunities in these industries we are working on, which gives us confidence that the growth can continue," TCS chief executive officer K Krithivasan said.

TechM's CEO Mohit Joshi, while cautioning against drawing broader conclusions from a single quarter's numbers, sounded optimistic.

"Because of the recent large deals, we are adding employees in multiple geographies, several hundred people in Europe, but also in India and in Egypt. We do expect to continue to add headcount as we continue in terms of growth," Joshi told reporters after earnings. Wipro was the only outlier, with its employee count seeing a drop of more than 6700.

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