India’s mid-sized IT firms plan to hire more than their larger peers, driven by steady client growth in the June quarter. While the country’s top five IT firms shed over 70,000 jobs in FY24, per Greyhound Research, mid-tier companies could potentially relieve some of the stress on employees and job aspirants affected by the hiring crunch.

Companies like KPIT Technologies, Coforge, LTIMindtree, Hexaware and Mphasis have posted good growth in Q1 despite macroeconomic headwinds that impacted margins of larger companies.

Sanchit Vir Gogia, Chief Analyst and CEO, Greyhound Research, said seven of ten mid-size firms expanded headcount due to demand in automotive, BFSI and Indian public sector engagements.

“Mid-tier firms neither over-hired during the boom nor carry costly bench structures. Their talent models are leaner, domain-aligned, and increasingly lateral-heavy — positioning them to win from the skill dislocation at larger firms,” he said.

Employee unions like the Nascent Information Technology Employees Senate (NITES) wrote to the Labour Ministry in July citing concerns about lateral hires. NITES President Harpreet Singh Saluja told businessline he has received many complaints from TCS, Wipro, Infosys employees regarding their employment.

In contrast, mid-size companies have treated their employees better, he said.

In the quarter, mid-size companies also reported improved attrition rates year-on-year, defying the larger sector trend. Meanwhile, companies like Tata Consultancy Services (TCS), HCL Technologies, Tech Mahindra, Infosys and Wipro have almost unanimously indicated worsening attrition rates. Greyhound Talent Pulse 2025 said that mid-tier IT firms have achieved a 10.8 per cent attrition rate YoY, compared to a 20.1 per cent churn among large-tier rivals.

“This reversal defies historic norms. With pyramid deflation and AI-led rationalisation driving exits in Tier-1s, mid-tier firms are benefiting from lateral inflows and tighter employee engagement. Many are offering domain ownership, faster promotion cycles, and senior roles to dislocated talent — rebalancing the industry talent flow,” it said.

While TCS, Wipro, Infosys and Tech Mahindra said they will honour fresher and lateral hirings, their assurances fall short considering there’s also been news of TCS planning to downsize its workforce and HCL Tech voicing uncertainty about workforce retainment, etc. An earlier analysis by businessline indicated how larger companies are showing mixed hiring patterns, due to cautious discretionary spending by clients, especially in the US.

Another analyst said that mid-tier companies are more confident about hiring because they have visibility on growth for the next couple of quarters.

“It’s not that macroeconomics isn’t impacting mid-tier firms but since they are getting client specific growth, they are more confident about coming quarters. It’s not that large companies are not hiring at all but aspirants have a wider scope in mid-tier companies,” said the expert on anonymity.

Headcount indiciates growth

Hexaware reported an upwards trend in offshore mix, utilisation and confirmed further adds to headcount, reflective of underlying growth. When the headcount increases and the utilisation improves, it’s a strong signal that the underlying volumes are increasing, said R Srikrishna, CEO of Hexaware. The company had planned to hire between 1,500 and 1,800 people in IT and reported that it has reached well in that range.

Campus hire crucial

KPIT Technologies said it will continue to go to campuses to cash in on a very important talent pool from an AI and skills perspective. Kishor Patil, Co-founder, CEO and Managing Director at KPIT, said the company approaches campuses with a three-digit or higher figure in mind and will continue its commitments to colleges this year as well.

Efficiency over growth

While LTIMindtree confirmed that fresher inductions will continue throughout the year, data also showed negative net adds to headcount over the last two quarters. Per the company, there are signs of non-linearity between revenue addition and headcount over the last two years. It added that the customer also has a significant role in redefining the way forward business model.

Similarly, Mphasis, too, said there is not going to be a linear correlation between utilisation and revenue growth.

Published on August 3, 2025