Top 5 IT services companies see 3.3% staff productivity boost in Q1; Wipro the only laggard as TCS, Infosys, HCLTech and Tech Mahindra log gains

Employee productivity at India's top 5 IT services providers rose 3.3% in the April-June quarter from a year earlier, even as the companies reported another year-on-year fall in headcount, an ET analysis shows.

On average, an employee at these firms earned $13,435 in revenue for the employer in the first quarter, roughly the same as the previous two quarters, and compared with $13,010 a year earlier.

Productivity refers to the revenue earned per employee. This figure has grown steadily from $11,865 four years ago.


This modest improvement in productivity reflects a structural shift rather than a temporary cost optimisation exercise, according to Neeti Sharma, chief executive at TeamLease Digital.

"Over the past year, companies have become far more disciplined on utilisation, kept bench strength to minimal , and slowed broad-based hiring while selectively investing in high-value AI, cloud and cybersecurity talent," Sharma said.

Artificial intelligence is beginning to improve delivery efficiency by automating coding, testing, documentation and knowledge management, experts said.

"This allows employees to handle more work than before," she said.

HCLTech led this metric with revenue of $16,303 per employee, followed by Infosys ($15,491). In the last four years, Infosys and market leader Tata Consultancy Services have seen the biggest jump in productivity, increasing it by 4% and 3.5%, respectively, per year, the analysis shows.

Employee productivity moved up for TCS (6.1%), Infosys (1.5%), HCLTech (2.6%) and Tech Mahindra (7.4%) in the first quarter. Wipro stands out as an outlier as it saw a decline in productivity, with its headcount going up in the same period, which could be on account of its recent acquisition. In Q1, Wipro acquired Mindsprint from Singapore-based Olam Group, whose impact on the company's revenue and productivity will only get fully clear in the current quarter.

The last two quarters marked a reversal of a year-long trend, when gains in productivity were muted as companies added employees, according to the ET analysis.

Indian IT companies have seen productivity improvement over the last few years, said Anandorup Ghose, partner, Deloitte Asia South Asia. "This has translated into revenue growth rate outstripping headcount growth rates. While this is naturally something that companies have been driving for a long time, the true benefit lies in the fact that companies have also seen productivity improvements faster than compensation cost growth," Ghose said.

Productivity growth in the five companies considered for the analysis appears to have peaked during FY24 and FY25, when it regularly grew at more than 5% on a year-on-year basis amid heavy cost-cutting. Since then, the growth has been relatively muted.

Over the last four quarters, the top five companies have seen a combined net reduction in headcount of more than 6,200. While the number fell by more than 19,000 at TCS and over 1,700 at Tech Mahindra, the other three added staffers. Wipro added the most at 9,812.