TCS's hiring surprise: Why India's biggest IT firm is adding jobs again
TCS added 9,279 employees in the April-June quarter after steep headcount declines in late 2025. The shift reflects selective hiring, redeployment and rising demand for AI and digital skills.
Less than a year ago, Tata Consultancy Services (TCS) found itself at the centre of one of the biggest workforce debates in India's IT industry.
The country's largest software service provider had reported a sharp decline in employee numbers, triggering concerns that artificial intelligence (AI), slowing global demand and cost pressures were forcing one of India's biggest private employers to cut jobs.
Three quarters later, the picture looks very different.
In the April-June quarter of FY27, TCS added a net 9,279 employees, taking its total headcount to 5,93,798. The hiring marks the company's biggest quarterly net addition in more than three years and comes after months of questions over whether India's IT hiring boom had come to an end.
So, what changed?
WHEN DID JOB LOSS COME TO NOTICE?
The story began in the September 2025 quarter, when TCS reported a net reduction of 19,755 employees — the steepest quarterly decline in the company's history.
The workforce shrank again in the December 2025 quarter, with another 11,151 employees leaving the company's rolls.
The back-to-back decline fuelled widespread speculation that TCS was carrying out a large-scale layoff as global clients slowed technology spending and AI began reshaping the way software services were delivered.
The sharp fall in headcount also sparked concerns that India's IT sector was entering a prolonged period of job cuts after years of aggressive hiring during the pandemic-driven technology boom.
WAS Q2 EMPLOYEE DROP REALLY A 20,000-JOB LAYOFF?
Not exactly.
As concerns grew, TCS moved to clarify what had actually happened.
In October 2025, Chief Human Resources Officer Sudeep Kunnumal said the company was not working towards any fixed layoff target.
He explained that the reduction reflected a mix of voluntary resignations and involuntary exits linked to performance management, business requirements and employees who could not be redeployed despite investments in learning, development and reskilling.
The company stressed that workforce decisions continued to be based on business needs rather than any pre-determined target to reduce headcount.
That distinction is important because a fall in net employee numbers does not automatically mean every exit was part of a mass layoff programme.
THE TURNAROUND DIDN'T HAPPEN OVERNIGHT
The recovery came in phases.
After two consecutive quarters of workforce reductions, TCS reported a net addition of 2,356 employees in the January-March 2026 quarter, suggesting that the sharp rationalisation phase was beginning to ease.
The momentum gathered pace in the April-June quarter, when the company added another 9,279 employees.
The company also onboarded around 14,000 campus recruits during the latest quarter, indicating that fresher hiring has continued even as recruitment becomes more targeted than before.
Rather than returning to the broad-based hiring seen during the post-pandemic boom, TCS now appears to be rebuilding its workforce selectively in areas where demand is improving.
BUSINESS NEVER REALLY STOPPED GROWING
The hiring rebound becomes easier to understand when viewed alongside TCS's latest business performance.
For the June quarter, the company reported a 5% year-on-year increase in consolidated net profit to Rs 13,349 crore, while revenue from operations rose 14% to Rs 72,275 crore.
Revenue also grew 0.4% sequentially in constant currency terms, while operating margins remained broadly stable at 24%.
The company's order book remained healthy at $9.5 billion during the quarter. It included an $800 million AI-led transformation deal with SKF, a strategic partnership with ServiceNow and another multi-million-dollar engagement with a Europe-based Fortune Global 50 company.
JM Financial Institutional Securities said revenue and margins were largely in line with expectations, with growth led by India while North America remained weak.
The brokerage noted that management expects overall demand to improve during the second quarter of FY27, with all major business verticals except Retail and Consumer Packaged Goods likely to perform better.
Importantly, TCS has indicated that it will continue investing for growth.
"TCS continues to focus on revenue growth and said it will not shy away from investments," JM Financial said, while maintaining its "Add" rating on the stock.
Those numbers suggest that the company was not shrinking because business had collapsed. Instead, it was recalibrating its workforce while continuing to win large contracts and invest in future growth areas.
AI IS CHANGING WHO TCS WANTS TO HIRE
Artificial intelligence is perhaps the biggest reason why TCS's hiring story appears contradictory.
Many assumed AI would immediately replace jobs in the IT industry.
Instead, TCS is hiring again — but not in the same way it did a few years ago.
The company has indicated that AI-related revenue remains relatively small and many AI projects are still short in duration, often lasting just one or two quarters. At the same time, clients increasingly want expertise in AI, cloud computing, cybersecurity and digital engineering.
That means hiring is becoming more specialised.
Some traditional roles are becoming redundant or being restructured, while demand is rising for employees with new-age technology skills.
This also explains why workforce reductions and hiring can happen at the same time.
SO, IS TCS HIRING AGAIN?
Yes—but with a different strategy.
The latest numbers suggest TCS has moved beyond the workforce rationalisation that dominated the second half of 2025.
Stable attrition, continued campus hiring, a strong order book and improving demand expectations have given the company confidence to expand its workforce again.
However, this is unlikely to be a return to the mass hiring seen after the pandemic.
Instead, the focus appears to be on hiring people with specialised skills while continuing to redeploy and reskill existing employees.
THE BIGGER PICTURE
Viewed together, the numbers tell a more nuanced story than the headlines suggested.
TCS did not simply cut nearly 20,000 jobs and then abruptly reverse course by hiring over 9,000 employees.
Instead, the company went through three distinct phases.
The September and December 2025 quarters were marked by workforce rationalisation through a combination of voluntary resignations, performance-linked exits and employees who could not be redeployed.
The March 2026 quarter signalled stabilisation, with net hiring turning positive again.
The latest June quarter marked a stronger recovery, supported by healthy deal wins, continued campus hiring and rising demand for AI and digital skills.
For India's largest IT employer, the message appears to be clear.
The future of hiring is unlikely to be about adding employees indiscriminately. Instead, it will be about hiring the right people with the right skills while continuously reskilling the existing workforce for an AI-driven technology industry.
Less than a year ago, Tata Consultancy Services (TCS) found itself at the centre of one of the biggest workforce debates in India's IT industry.
The country's largest software service provider had reported a sharp decline in employee numbers, triggering concerns that artificial intelligence (AI), slowing global demand and cost pressures were forcing one of India's biggest private employers to cut jobs.
Three quarters later, the picture looks very different.
In the April-June quarter of FY27, TCS added a net 9,279 employees, taking its total headcount to 5,93,798. The hiring marks the company's biggest quarterly net addition in more than three years and comes after months of questions over whether India's IT hiring boom had come to an end.
So, what changed?
WHEN DID JOB LOSS COME TO NOTICE?
The story began in the September 2025 quarter, when TCS reported a net reduction of 19,755 employees — the steepest quarterly decline in the company's history.
The workforce shrank again in the December 2025 quarter, with another 11,151 employees leaving the company's rolls.
The back-to-back decline fuelled widespread speculation that TCS was carrying out a large-scale layoff as global clients slowed technology spending and AI began reshaping the way software services were delivered.
The sharp fall in headcount also sparked concerns that India's IT sector was entering a prolonged period of job cuts after years of aggressive hiring during the pandemic-driven technology boom.
WAS Q2 EMPLOYEE DROP REALLY A 20,000-JOB LAYOFF?
Not exactly.
As concerns grew, TCS moved to clarify what had actually happened.
In October 2025, Chief Human Resources Officer Sudeep Kunnumal said the company was not working towards any fixed layoff target.
He explained that the reduction reflected a mix of voluntary resignations and involuntary exits linked to performance management, business requirements and employees who could not be redeployed despite investments in learning, development and reskilling.
The company stressed that workforce decisions continued to be based on business needs rather than any pre-determined target to reduce headcount.
That distinction is important because a fall in net employee numbers does not automatically mean every exit was part of a mass layoff programme.
THE TURNAROUND DIDN'T HAPPEN OVERNIGHT
The recovery came in phases.
After two consecutive quarters of workforce reductions, TCS reported a net addition of 2,356 employees in the January-March 2026 quarter, suggesting that the sharp rationalisation phase was beginning to ease.
The momentum gathered pace in the April-June quarter, when the company added another 9,279 employees.
The company also onboarded around 14,000 campus recruits during the latest quarter, indicating that fresher hiring has continued even as recruitment becomes more targeted than before.
Rather than returning to the broad-based hiring seen during the post-pandemic boom, TCS now appears to be rebuilding its workforce selectively in areas where demand is improving.
BUSINESS NEVER REALLY STOPPED GROWING
The hiring rebound becomes easier to understand when viewed alongside TCS's latest business performance.
For the June quarter, the company reported a 5% year-on-year increase in consolidated net profit to Rs 13,349 crore, while revenue from operations rose 14% to Rs 72,275 crore.
Revenue also grew 0.4% sequentially in constant currency terms, while operating margins remained broadly stable at 24%.
The company's order book remained healthy at $9.5 billion during the quarter. It included an $800 million AI-led transformation deal with SKF, a strategic partnership with ServiceNow and another multi-million-dollar engagement with a Europe-based Fortune Global 50 company.
JM Financial Institutional Securities said revenue and margins were largely in line with expectations, with growth led by India while North America remained weak.
The brokerage noted that management expects overall demand to improve during the second quarter of FY27, with all major business verticals except Retail and Consumer Packaged Goods likely to perform better.
Importantly, TCS has indicated that it will continue investing for growth.
"TCS continues to focus on revenue growth and said it will not shy away from investments," JM Financial said, while maintaining its "Add" rating on the stock.
Those numbers suggest that the company was not shrinking because business had collapsed. Instead, it was recalibrating its workforce while continuing to win large contracts and invest in future growth areas.
AI IS CHANGING WHO TCS WANTS TO HIRE
Artificial intelligence is perhaps the biggest reason why TCS's hiring story appears contradictory.
Many assumed AI would immediately replace jobs in the IT industry.
Instead, TCS is hiring again — but not in the same way it did a few years ago.
The company has indicated that AI-related revenue remains relatively small and many AI projects are still short in duration, often lasting just one or two quarters. At the same time, clients increasingly want expertise in AI, cloud computing, cybersecurity and digital engineering.
That means hiring is becoming more specialised.
Some traditional roles are becoming redundant or being restructured, while demand is rising for employees with new-age technology skills.
This also explains why workforce reductions and hiring can happen at the same time.
SO, IS TCS HIRING AGAIN?
Yes—but with a different strategy.
The latest numbers suggest TCS has moved beyond the workforce rationalisation that dominated the second half of 2025.
Stable attrition, continued campus hiring, a strong order book and improving demand expectations have given the company confidence to expand its workforce again.
However, this is unlikely to be a return to the mass hiring seen after the pandemic.
Instead, the focus appears to be on hiring people with specialised skills while continuing to redeploy and reskill existing employees.
THE BIGGER PICTURE
Viewed together, the numbers tell a more nuanced story than the headlines suggested.
TCS did not simply cut nearly 20,000 jobs and then abruptly reverse course by hiring over 9,000 employees.
Instead, the company went through three distinct phases.
The September and December 2025 quarters were marked by workforce rationalisation through a combination of voluntary resignations, performance-linked exits and employees who could not be redeployed.
The March 2026 quarter signalled stabilisation, with net hiring turning positive again.
The latest June quarter marked a stronger recovery, supported by healthy deal wins, continued campus hiring and rising demand for AI and digital skills.
For India's largest IT employer, the message appears to be clear.
The future of hiring is unlikely to be about adding employees indiscriminately. Instead, it will be about hiring the right people with the right skills while continuously reskilling the existing workforce for an AI-driven technology industry.
