'AI-Led' — The New IT Mantra That Enables Growth With Leaner Workforce

The Indian IT industry is witnessing a major structural reset. The hiring frenzy triggered by the digital rush during Covid-19 pandemic has not just subsided, but it has reversed.

As artificial intelligence becomes embedded in business models, headcount growth is slowing, and revenue scaling is no longer dependent on mass hiring.

AI has upended the traditional growth model of Indian IT services. For decades, scaling meant hiring thousands. But now, with AI enabling higher productivity, top companies are meeting delivery targets with leaner teams.

As a result, despite revenue growth stabilising for some players, net employee additions have turned negative post-FY23. Companies are coming ahead and stating how revenue increase is not equal to employee count addition anymore.

Hiring across India’s top IT firms surged during the pandemic years (FY20–22), driven by demand for cloud, digital, and remote services. But post-AI adoption, the same firms are seeing workforce reductions, a trend echoed globally across tech majors.

Wipro’s headcount has shrunk continuously, while TCS and Infosys have slowed hiring to the lowest levels in years. A similar trend is seen among some of the global IT majors, with Cognizant reducing its workforce in the post-AI era.

Attrition climbed steadily through the pre-Covid period, peaked in FY23, and has now begun to stabilise.

As job openings shrink and employees seek security over switches, churn rates are cooling across the board. FY24 and FY25 showed early signs of this stabilisation, reflecting a calmer employment landscape after the post-pandemic hiring rush.

Attrition dropped by 600–800 bps across firms by FY25, aided by hiring freezes and cautious outlook

AI-led cost optimisation has also changed how growth appears on paper. Constant currency (CC) revenue growth, once a key performance metric, has dipped to low single digits for most firms.

TCS, Infosys and Wipro saw peak growth in FY22 due to digital transformation and by FY25, growth moderated sharply. Weak discretionary spends, project deferrals, and GenAI-led uncertainty narrowed topline 

Wipro, notably, slipped into the red in the post-Covid period. Compared to the high growth seen during the Covid boom, IT majors now report modest topline expansion as clients tighten discretionary tech spends and prioritise GenAI pilots over large-scale rollouts.

While AI has slowed hiring, it hasn’t triggered mass layoffs apart from TCS. The shift is more about efficiency than replacement. Projects now need fewer hands, not necessarily because jobs are eliminated, but because AI tools reduce the manual effort.

The question isn’t whether AI will kill jobs, but how fast the industry can upskill its workforce to match new delivery paradigms.

• AI has ended the Covid-led hiring boom, turning net headcount negative at some IT majors.

• Attrition peaked in FY23 but is now stabilising with fewer openings and growing job security concerns.

• Constant currency growth has slowed post-AI as discretionary spending takes a hit.

• Revenue and headcount growth might see a delink soon, leading to lower hiring.