The traditional IT services model of growth in revenue complemented by a proportionate spike in headcount, seems to be shaking up, as companies are drawing more revenue out of each employee.
According to data from company financials, four among the five major Tier 1 Indian IT players have seen a 3-4 per cent increase in revenue per employee for the financial year ending March 2026, when compared to the previous fiscal. This is slightly higher than the roughly 2-2.5 per cent growth in FY25 compared to FY24.
Growth Numbers
Tata Consultancy Services (TCS), for instance, posted $51,360 in revenue per employee, up 3.5 per cent from $49,638 for the year ending March 2025. For Infosys the revenue per employee went up by 3 per cent to $61,350, while Tech Mahindra saw a 2.7 per cent uptick to $43,260.
HCLTech saw the largest increase, going up by 4.2 per cent to $61,350. Interestingly, the company had also seen a large increase of 6.2 per cent in this metric for FY25 as against FY24.
Wipro, however, bucked the trend posting a degrowth in revenue per employee at $43,270 down 3.9 per cent from FY25.
Project Delivery
Speaking to businessline, analysts said that the growth is driven by both rationalisation in total headcount and early productivity gains from automation and AI being embedded in project delivery.
According to Biswajeet Mahapatra, Principal Analyst, Forrester, AI is accounting for roughly one quarter to one third of the improvement in revenue per employee. “The impact comes from an AI-driven task level efficiency in coding, testing, service management, and documentation,” he said.
Kapil Joshi, CEO – IT Staffing, Quess Corp said that use of Generative AI tools in coding, testing, and design is also expected to improve margins by 100-200 basis points. “In addition, large-scale reskilling initiatives, where each leading firm has upskilled 10,000 to 80,000 employees in AI and related technologies, are enabling teams to work faster and more efficiently,” he said.
Utilisation Rate
Joshi also highlighted that better utilisation rate at about 84-87 per cent and a higher concentration of offshore delivery have played its part.
AI-enabled Productivity
Francis Padamadan, CEO, Xpheno - a specialist staffing firm however believes that efficiencies drawn from AI use in the Indian IT services players are not yet strong enough to make them replace human resource. “The optimisation of headcounts is more revenue outlook and cost pressures driven, rather than powered by an AI lift in productivity,” he said.
TCS’s net headcount as of Q4 FY26 was 3.9 per cent lower than the same quarter last year while Infosys and HCLTech recorded a growth of 1.5 per cent and 1.7 per cent respectively. Wipro’s headcount went up by 3.7 per cent as against Tech Mahindra which went down by 0.75 per cent.
Published on April 24, 2026