India's leading information technology (IT) companies are expected to operate with significantly leaner bench strength in the coming years as artificial intelligence (AI), improved workforce planning and demand-driven hiring continue to reshape the sector's traditional employment model.
The average bench strength across major IT services firms, including Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro and Tech Mahindra, has already declined to the high single digits or around 12% over the past three years.
According to a Moneycontrol report citing staffing firm TeamLease Digital, the figure is expected to fall further to around 8-10% in FY27. This marks a significant shift from the pre-AI era, when companies typically maintained bench strength of 20-30%.
In the IT services industry, the "bench" refers to employees who remain on the company's payroll but are not assigned to active client projects. Traditionally, firms maintained large benches to ensure engineers could be deployed immediately when new projects were secured.
WHY IS BENCH STRENGTH DECLINING?
IT companies are moving away from hiring employees in anticipation of future demand. Instead, recruitment has become increasingly demand-driven, with greater emphasis on specialised skills in areas such as artificial intelligence, cloud computing, cybersecurity and data analytics.
"The bench has become a lot leaner over the last three years than what it used to be. Hiring has become far more demand-led and focused on niche skills. Companies are using AI, better workforce planning and stronger demand forecasting to improve utilization instead of maintaining large standby teams," TeamLease Digital CEO Neeti Sharma told Moneycontrol.
The report also noted that the time employees spend on the bench has reduced. Workers now typically remain unassigned for 30-45 days, compared to 45-60 days in the past.
COMPANIES FOCUSING ON HIGHER UTILISATION
Another major factor behind the shrinking bench is the industry's push to improve employee utilisation amid slower revenue growth and productivity gains driven by AI.
Sumit Pokharna, Vice President – Fundamental Research at Kotak Neo, told Moneycontrol that companies are increasingly seeking employees with relevant AI skills who can be deployed quickly.
"Currently, utilisation rates for IT firms are very high. Controlling and maintaining a tight workforce is the only way for companies to deal with the topline and revenue challenges amid AI deflationary pressures. Otherwise, it could become a margin issue," he said.
DOES THIS SIGNAL MORE LAYOFFS?
Not necessarily.
According to the report, companies are prioritising reskilling and upskilling their existing workforce rather than reducing headcount.
Neeti Sharma said organisations are investing in training programmes to redeploy employees to projects involving newer technologies.
"Companies are making investments in upskilling and reskilling their workforce to redeploy them in newer projects. However, in cases where this redeployment is not possible, companies have no choice but to churn out excess capacity. This is less about reducing headcount and more about reshaping the workforce," she said.
Francis Padamadan, CEO of specialist staffing firm Xpheno, told Moneycontrol that most IT companies have already reduced the excess workforce created during the post-pandemic hiring surge.
"IT service firms have gone through cycles of offloading excess capacity since the post-pandemic buoyant hiring phase. There hence isn't much of a flab to shed at this point or churn out excess capacity, unless the AI investments pay back in the near term and replace more seats," he said.
HIRING CONTINUES, BUT WITH A DIFFERENT FOCUS
Despite maintaining leaner benches, IT companies are not slowing recruitment altogether.
The report said most major firms have indicated they will continue or resume hiring, with a stronger emphasis on specialised talent.
TCS is investing in experiential and project-based learning to improve deployment readiness while building a more skills-focused workforce. Infosys plans to recruit around 6,000 frontier engineers over the coming years.
HCLTech is refining its hiring strategy by focusing on a smaller pool of specialised freshers who are expected to develop into frontier engineers within the next two to three years.
Tech Mahindra, which skipped campus hiring last year, has also announced plans to resume fresher recruitment as business visibility improves. Wipro remains the only major IT company that has not announced similar hiring plans, the report said.
The findings indicate that India's IT industry is steadily moving away from the long-standing practice of maintaining large standby workforces.
Instead of hiring in bulk and keeping employees on the bench until projects become available, companies are increasingly relying on AI-driven workforce planning, demand forecasting and continuous upskilling to ensure employees remain project-ready.
For job seekers, this shift means employers are placing greater importance on specialised, industry-relevant skills and deployment readiness rather than maintaining large pools of employees waiting for future assignments.
