Tech Mahindra trimmed its workforce sharply in the December quarter, cutting 3,098 employees sequentially even as profits and margins improved. The move reflects a wider trend across India’s IT sector, where companies are tightening costs amid cautious client spending and internal restructuring.
IT headcount sees the biggest impact
In the third quarter ended December 31, 2025, Tech Mahindra saw its core IT headcount fall by 2,334 employees on a quarter-on-quarter basis. The overall employee strength — including IT, business process services (BPS), sales and support functions — stood at 149,616, marking a decline of 872 employees year-on-year.
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Despite the reduction, attrition levels showed some stability. The company’s last twelve-month (LTM) attrition eased to 12.3%, down from 12.8% in the previous quarter, indicating lower voluntary exits.
Q3 results: margins surge, deal wins improve
On the financial front, Tech Mahindra delivered a strong operating performance. The company reported a 14.1% year-on-year rise in consolidated net profit at ₹1,122 crore for Q3 FY26, supported by sharp margin expansion. Revenue from operations grew 8.3% to ₹14,393 crore compared with ₹13,286 crore a year ago.
Operating metrics improved significantly, with EBIT jumping 40.1% year-on-year to ₹1,892 crore. EBIT margin expanded to 13.1%, reflecting tighter cost controls and improved execution. The company also reported new deal wins worth $1.1 billion during the quarter, up 47% from the same period last year, signalling better demand traction.
How peers fared in the same quarter
Tech Mahindra’s headcount reduction comes at a time when the broader IT industry is moving in different directions.
Tata Consultancy Services, India’s largest IT services firm, reported a net decline of 11,151 employees during the quarter. The company is in the middle of a business restructuring exercise and has indicated plans to let go of around 2% of its workforce, or roughly 12,000 employees.
In contrast, Infosys added 5,043 employees in Q3, marking the sixth consecutive quarter of net headcount addition — a sign of relatively steady demand and hiring confidence.
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Meanwhile, HCLTech saw a marginal decline of 261 employees during the quarter, reflecting a more stable workforce position compared with peers.
Bigger picture
While Tech Mahindra’s Q3 numbers highlight improving profitability and deal momentum, the drop in headcount underlines the cautious stance IT companies are taking on hiring. With clients still closely watching budgets, workforce optimisation remains a key lever — even as margins and deal pipelines show signs of recovery.
