Techno Blogging

India's Top Four IT Outsourcers Halt Hiring as AI Adoption Accelerates

India's four largest IT outsourcers—HCL, Infosys, TCS, and Wipro—have essentially stopped hiring, potentially coinciding with their increased use of AI to deliver services.

The companies announced quarterly results over the last ten days showing decent financial health. HCL reported $3.8 billion in revenue, up 7.4% year-over-year. Infosys posted $5.1 billion, up 1.7% year-over-year. TCS revenue of $7.5 billion represented a 3% increase, while Wipro's $2.6 billion in revenue marked a 5.5% year-over-year improvement.

Despite the revenue growth, headcount trends marked a sharp departure from historical patterns. India's top technology companies typically hire more than 10,000 people per quarter, a recruitment rate that offsets attrition and drives substantial headcount increases. This quarter, Wipro increased its payroll by 6,500 people and Infosys hired 5,000—muted growth by their standards—while TCS and HCL reduced headcount by 11,000 and 261 people respectively.
Over the past year, the four companies added just 3,910 staff combined, an unusually slow hiring rate.

All four companies told investors they are using more AI to deliver client services, either by adopting the technology to streamline their own operations or by integrating it into tools they provide to customers. Infosys created a tool that uses AI to build Global Capability Centers—the company's term for offshored and outsourced operations it runs for clients in India—that themselves use AI to improve customer operations.

The companies reported strong client demand for AI expertise to streamline operations. HCL pointed to 60 of its priority customers adopting one of its AI services. TCS highlighted using AI to accelerate software development for a major client, while Wipro noted strong adoption rates for its AI-infused operations tools WINGS and WEGA.

Despite the overall hiring slowdown, all four companies are recruiting people with AI skills as quickly as they can find them while training senior staff who have yet to master the technology—a new dimension to the services industry's traditional practice of maintaining high margins by having inexperienced, lower-salaried junior staff handle much of the client work after high-cost seniors lead with consultancy.