Indian IT firms cut bench strength amid AI push
What's the story
India's leading IT services companies, including Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro, and Tech Mahindra, are witnessing a decline in their average bench strength. The number has dropped to late single digits or at most 12% over the past three years. This is due to restructuring efforts aimed at adapting to artificial intelligence (AI)-led disruptions and improving employee utilization.
Industry change
Bench strength in pre-AI era
The current average bench strength is a far cry from the pre-AI era, when it was around 20-30%. This data comes from staffing firm TeamLease Digital.
In the IT services industry, "benching" refers to employees on payroll who are not working on any active projects. They are usually kept as a backup for sudden client demands.
Forecast
Projections for FY27
By FY27, the average bench strength is expected to fall further to around 8-10%. Some companies may even operate with a leaner workforce, TeamLease has predicted.
Meanwhile, the time employees spend on the bench has also come down from 45-60 days earlier to around 30-45 days now.
Neeti Sharma, CEO of TeamLease Digital told Moneycontrol that hiring has become more demand-driven and focused on niche skills due to AI adoption.
Hiring trends
Selective hiring in the AI era
The shift in focus is evident as IT companies are hiring selectively, with demand mainly in AI, cloud, cybersecurity, and data roles.
Sumit Pokharna, VP of Fundamental Research at Kotak Neo, said companies are opting for a "relevant" workforce that is AI-skilled and easily deployable.
He added that controlling and maintaining a tight workforce is the only way for these firms to deal with the topline and revenue challenges amid AI deflationary pressures.
Workforce impact
Utilization rates and employee churn concerns
Despite improving employee utilization rates sequentially in Q1-FY27, the year-on-year growth has been slower than previous years.
The average net utilization has dropped from 87.1% in Q2-2024 to 86.1% in Q2-2025 and now further down to 85% in Q2-2026, according to data from staffing firm Xpheno.
However, industry experts say this focus on reduced bench strength won't lead to higher employee churn as companies are investing heavily into reskilling their workforce while slowing hiring as they restructure their talent base.
Hiring revival
Resuming hiring amid restructuring
Despite the changes, all major IT companies except Wipro have spoken about resuming hiring in good numbers this quarter.
Even Tech Mahindra, which skipped campus hiring last year, has said it will start hiring freshers again.
TCS is investing in experiential project-based learning to improve deployment readiness while gradually moving toward a more skills-centric employee pyramid.