Despiteall the negative news flow, sharp correction in market cap and AI-led disruption; Indian IT companies seem to be holding their ground. As a thumb rule, employee addition numbers have been considered as a solid indicator of things in store. And this vital parameter is showing positive momentum going ahead. Take for example the movement in total employee strength of major Indian IT companies during the second quarter of current financial year (FY27).

TCS- India’s largest IT services company, added 4,258 employees during July-September quarter of FY27, making it second consecutivequarter of headcount addition. HCLTech, another large IT services firm, saw its total headcount growing by 6,450 employees in Q2 of FY27. This was also higher than 1,056 employees added during first quarter of FY27. Similarly, mid-tier IT firm- Tech Mahindra witnessed a solid addition in employee strength during the second quarter. The company added around 5,500 employees, making it the highest quarterly addition in two years. However, Wipro was the only exception, which reduced its employee strength by 6,716 during the second quarter. Other than Wipro, most large and mid-tier IT companies increased their headcount. Moreover, fresher hiring commentary and numbers looked encouraging for the second quarter and beyond.

In this perspective, it is essential to analyse the headcount movement with the overall growth prospects going ahead. As employee addition is a lead indicator in terms of revenue growth; Q2 numbers indicate a bit of optimism in terms of future growth. Despite increasing pace of AI-led automation, Indian IT companies are adapting well. The overall contribution of AI revenue in the total revenue pie is increasing. That means, AI-led deflation (price decline in legacy IT projects) is slowly coming down. Moreover, except one or two, most companies’ deal pipeline has increased. Additionally, the AI component in the outsourcing projects is increasing. These are all good news for the industry. However, one should look at the current employee addition trend with a different perspective. Because though the employee strength is increasing, notably the composition of staffers is going through a paradigm shift. And that is due to the ongoing AI wave. Most employees, who are added, have marketable AI skillsets and are able to deliver value in the AI projects. Even among freshers, companies are looking for those fresh graduates with solid AI skills and an aptitude to learn new AI skills at the quickest. So, the IT staffing market has rapidly moved towards professionals with AI skills in the last two years.

Another significant development should also be highlighted when evaluating the headcount growth in Q2 of FY27. Some large companies have acquired the GCC units in India from their parent firms. As a result, employees of these acquired entities have added to those companies’ headcount. So, the headcount addition is not entirely organic in nature for some firms. Nonetheless, headcount addition indicates that Indian IT companies are able to hold ground in a low growth environment. It is now to be seen how IT companies leverage their workforce to ride the AI wave?