India’s largest IT services company Tata consultancy Services (TCS) saw its headcount fall by nearly 24,000 in fiscal year 2026 (FY2026). The company ended the fourth quarter with 584,519 employees, down 23,460 from a year ago. Commenting on the same, CHRO Sudeep Kunnumal said that the entire decline cannot be attributed to last year’s restructuring. He added that the company has already made 25,000 campus offers and remains on track to hire around 40,000 freshers annually. “Last year, we onboarded 44,000 trainees. We have already made 25,000 campus offers in India and will continue to be among the largest recruiters across universities and the market,” Kunnumal told TOI. TCS also added 2,356 employees sequentially with lateral and fresher hiring. However, the company did not give any target for FY27 hiring.TCS also announced that its layoffs cycle is complete. The company had said last year that it will lay off 2% of its workforce and tighten bench policies, which also led to voluntary exits, primarily in the mid-to-senior layer. “The restructuring exercise was completed,” the company said in a statement.
TCS message to those saying that Indian IT will be dead by 2030
CEO K Krithivasan also responded strongly to recent assertions that the IT services industry will be dead by 2030. Krithivasan said that, on the contrary, enterprises will need help from firms like TCS to derive the full benefit of AI.TCS chief operating officer Aarthi Subramanian added that there is a widening gap between AI technology and enterprise adoption, which is struggling to catch up with the pace of evolution. Addressing concerns that advanced AI systems such as Anthropic’s Claude Cowork and Claude Mythos could disrupt traditional IT services, Subramanian told ET that these are developments in which TCS sees a “big opportunity.” At the same time, TCS CEO acknowledged that the company did see a decline, but asserted that it is not a matter of concern and growth is back. “Yes, nobody can dispute that there’s a decline,” Krithivasan said. “But the decline happened in Q1 because of a large transformation programme that ended. Subsequent to Q1, we had three consecutive quarters of growth. So, we are going into the next year with the momentum behind us. And then we are talking about the significant order book and the mega deals. Our international revenue has been stronger again,” he added.
TCS to return to standard salary increment cycle
With a strong pipeline, three freshly signed mega deals, and four new clients crossing the $100 million annual revenue threshold, TCS CEO Krithivasan indicated that the company aims to surpass its 4.6% constant currency growth for FY26 in the coming year. The company has also announced a return to its standard salary increment cycle — a signal, Krithivasan said is an implicit vote of confidence in the demand environment ahead.
TCS Q4 is a mixed bag
TCS posted a 12% rise in net profit to Rs 13,718 crore in the March quarter, while revenue rose 9.6% to ₹70,698 crore. Sequentially, profit was up 19.4% and revenue rose 5.4%. The numbers exceeded or matched expectations after several quarters of muted growth, aided by a weak rupee and large deal wins. Indian IT giant, however, posted its first annual revenue decline since going public at 2.4% in constant currency terms for FY26.The company, which also reported the highest net margin in the last four years, said its AI revenue crossed $2.3 billion. It clocked the highest total contract value (TCV) ever with three large deals for the quarter and five for the year, signalling a potential turnaround as uncertainties sparked by the war in West Asia continue to weigh on growth. TCV was $40.7 billion in FY26 and $12 billion in Q4.Fourth-quarter AI services revenue rose to $2.3 billion from $1.8 billion in the December quarter and $1.5 billion in the September quarter, when the company first reported the category separately.During the fourth quarter, TCS signed contracts with OpenAI and AMD for building data centres powered by AI chips. Operating margin, a key metric, swelled to 25% in FY26, its highest in four years, the company said.
