IT reworks hiring for Gen Z; HCLTech CEO on AI

Happy Thursday! India's IT sector is seeing a sharp rise in replacement hiring as Gen Z professionals switch jobs faster. This and more in today's ETtech Morning Dispatch.

Also in the letter:
■ Sport tech firms' new play
■ ETtech Done Deals
■ Tech Mahindra's Q4

---

India's IT companies are staring at a churn problem. Gen Z employees are leaving jobs faster than previous generations, triggering a spike in replacement hiring.

Data decoded:

• Staffing experts say average Gen Z tenure is now about 1.1 years. That is forcing companies to rethink how they hire, onboard, train, and retain young workers.
• About 35-40% of Gen Z hiring across the broader IT sector is now replacement-driven, up from 20-25% two years ago.
• In IT services, 55-60% of entry-level hiring is now driven by replacements, experts said.

Also Read: Tech job openings fall 8% in April as AI replaces headcount

Where is the pressure: The steepest drop in tenure expectations is in global capability centres (GCCs) and niche product roles, where skills are specialised, and demand is high.

Shorter tenures are also a byproduct of changing hiring strategies. Companies are shifting to more flexible, capability-led hiring models as artificial intelligence (AI) reshapes roles, workflows and demand.

Also Read: Indian companies turn to outsourced cybersecurity to bridge talent gap

---

C Vijayakumar, CEO, HCLTech

HCLTech expects AI-led deflation of 2% to 4% on annual revenue. However, CEO C Vijayakumar told us in an interview that newer AI-linked services should help offset much of that impact.

The IT major reported its Q4 on Tuesday and issued a muted outlook for FY27. The guidance spooked investors. HCL shares fell more than 10% on Wednesday on the National Stock Exchange.

Big investments: “In the tech vertical, big data centre investments and associated services seem to be going strong. It is a big opportunity, especially in India, because it will be one of the largest consumers of AI. Fundamentally, it's a very prudent kind of business opportunity,” he said, without mentioning how the company will foray into it.

Yes, and: HCLTech acknowledged that AI-led deflation is shrinking deal sizes. Vijayakumar framed that as reduced delivery effort, not outright pricing pressure.

“The total contract value (TCV) has remained flat despite deal sizes becoming smaller. That should be looked at as a very positive factor," he said.

HCLTech's deal bookings for FY26 were $9.32 billion, compared with $9.26 billion in FY25.

---

Across India, sport is turning into a weekly ritual rather than a once-in-a-while hobby, A growing tribe of “everyday athletes” is using sport as a social and fitness habit, fuelled by easier access to courts, curated games and reliable playing partners.

Startups in this space have seen revenue jump by as much as nine times over the past five years. Urban consumers are swapping solo, gym-based workouts for sport-led experiences such as badminton, pickleball, and neighbourhood community games.

Tell me more: Platforms such as Hudle, Playo, KheloMore, and Machaxi are building on this shift in behaviour. Machaxi, for instance, has grown revenue from Rs 5 crore in FY24 to a projected Rs 45 crore in FY26.

The platforms are also seeing strong repeat usage.

• Playo operates in 150 cities across five countries.
• Hudle facilitates about 24 lakh games annually.
• KheloMore has expanded to over 185 cities, with nearly 75,000 monthly bookings.

The habit shift: The story is no longer about booking a court. These platforms are helping users build a routine in which sport becomes a weekly anchor for socialising and staying fit, rather than an occasional plan.

Why this matters: Sports is emerging as a defined consumer category. Startups are moving beyond simple court bookings to coaching, tournaments, leagues, and community-led experiences.

---

Kabeer Biswas, founder, M

Dunzo cofounder Kabeer Biswas has raised Rs 102 crore for M, an AI-driven concierge startup focused on household maintenance.

Round snapshot:

• Peak XV Partners led the seed round with about Rs 46.4 crore.
• Blume Ventures invested Rs 37.1 crore.
• Cred chipped in Rs 18.5 crore.
• The round values M at roughly Rs 300 crore post money.

Karan Shroff, cofounder, LightFury

Gaming startup LightFury Games has raised $11 million (about Rs 103 crore) in a funding round from Blume Ventures, V3 Ventures, MIXI and Times Internet.

Details: The startup will also get strategic backing from Indian cricketers, including MS Dhoni, Jasprit Bumrah and Hardik Pandya, as it looks to build a global AAA cricket gaming franchise.

Founded in 2024 by Karan Shroff, Tina Balachandran, who earlier worked at Unacademy, and Anurag Banerjee, formerly associated with Ubisoft Singapore, the company is positioning itself as an AAA-focused studio aiming to build globally competitive titles from India.

---

Mohit Joshi, CEO, Tech Mahindra

Tech Mahindra's Q4 report: Tech Mahindra on Wednesday reported a 16% year-on-year increase in quarterly net profit to Rs 1,354 crore, driven by improved operational performance and margin expansion. Sequentially, the March-quarter net profit was up by 20.7%.

Zerodha shuts Zero1 initiative: Zerodha has pulled the plug on Zero1 Network, its media initiative for creators, citing regulatory uncertainty around financial influencers, or finfluencers.

---

■ AI tools are helping mediocre North Korean hackers steal millions (Wired)

■ AI robot outplays humans in table tennis milestone (FT)

■ Deadly deepfakes: A survival guide for the age of algorithmic war (Rest of World)