TCS Headcount Falls by 11,151 Even as AI Workforce Crosses 2,17,000 in Q3

TCS ended the December quarter with 5,82,163 employees, down 11,151 from the previous quarter, even as it sharply expanded its pool of AI-trained staff and posted steady financial performance.

The company reported revenue of ₹67,087 crore for Q3 FY26, up 2% quarter-on-quarter, and net income of ₹13,438 crore, an increase of 8.5% year-on-year. Operating margin stood at 25.2%, while annualised AI services revenue rose to $1.8 billion, up 17.3% sequentially on a constant-currency basis.

The decline in overall headcount highlights how TCS is reshaping its workforce as it moves toward AI-led delivery. Even with fewer employees on the rolls, the company said it now has more than 217,000 associates with advanced AI skills working across client projects.

“Our associates are at the heart of our transformation into an AI-first enterprise,” chief HR officer Sudeep Kunnumal said. “As of this quarter, there are over 217,000 associates with advanced AI skills, directly powering client success at scale. We doubled our intake of fresh graduates with higher-order skills, rapidly expanding our next generation talent pool.”

The numbers point to a shift away from traditional manpower heavy delivery models toward higher-skilled, AI-enabled teams. CEO K Krithivasan has said that every new engagement at TCS is now designed to be AI-led, with automation improving productivity and reducing the volume of routine work.

That shift is also reflected in the company’s growing AI business. TCS said its AI services now generate $1.8 billion in annualised revenue, while total contract value for the quarter stood at $9.3 billion, suggesting strong enterprise demand for AI-driven transformation.

Chief financial officer Samir Seksaria said the company’s margin stability and cash generation gave it the confidence to continue investing in both technology and talent. Cash flow from operations in Q3 was 130.4 per cent of net income.

Together, the Q3 numbers show TCS using a smaller but more skilled workforce to support its push toward becoming an AI-led services company, even as traditional hiring and headcount growth slow across Indian IT.

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