TCS vs Infosys: Which IT Stock Has Cut More Jobs Since AI Took Off?

The rise of generative artificial intelligence has changed how investors view the IT services industry. As companies automate coding, testing, and other repetitive tasks, a key question has emerged: can IT companies grow profit with fewer employees? Employee data from India’s two largest IT services companies, TCS and Infosys, offers an interesting way to examine this question.

TCS saw its headcount fall sharply in FY26, while Infosys continued to add employees. At the same time, both companies have continued investing in AI and hiring freshers. This makes the comparison more complicated than simply calling every job cut an AI-led productivity gain.

TCS vs Infosys: How Has Headcount Changed?

So, which company has reduced more employees since Q1 FY24, and what does the quarterly data actually show?

TCS started Q1 FY24 with 615,318 employees and stood at 593,798 in Q1 FY27. However, the biggest change came during FY26. Its workforce fell from 613,069 in Q1 FY26 to 584,519 by Q4 FY26, a decline of 28,550 employees during the year. It then added 9,279 employees in Q1 FY27.

Infosys followed a very different path. Its headcount declined during FY24 but recovered during FY25 and FY26. The company ended FY26 with 328,594 employees, compared with 323,578 in FY25 and 317,240 in FY24.

Therefore, on the headline question, TCS has clearly seen a larger workforce reduction. Between Q4 FY25 and Q4 FY26, TCS’s headcount fell by 23,460, while Infosys added 5,016 employees.

Profit Growth Gives Important Context

Headcount by itself cannot establish whether AI is replacing employees. The profit trend needs to be considered alongside the workforce numbers. TCS’s annual profit rose from Rs 46,099 crore in FY24 to Rs 49,454 crore in FY26, while its headcount fell from 615,318 to 584,519. FY26 profits growth remained flat to moderate even though the measures taken by the company.

Infosys, meanwhile, saw annual profit increase from Rs 26,248 crore in FY24 to Rs 29,474 crore in FY26, while headcount rose from 317,240 to 328,594. The contrast shows that TCS had moderate profit growth despite reducing its workforce over the period, while Infosys expanded both profit and headcount.

TCS has cut more jobs than Infosys, with its headcount falling sharply in FY26 while Infosys continuedch to add employees. However, the comparison does not suggest that AI alone drove the difference. TCS’s weaker demand environment and workforce restructuring also played a role, while both companies continue to invest in AI and hire fresh talent.

Attrition and Fresher Hiring Tell a Different Story

TCS’s LTM (Last Twelve Months) attrition stood at 17.8 percent in Q1 FY24 and declined to 12.5 percent by Q4 FY24. It later rose to 13.7 percent in Q4 FY26. Despite the workforce reduction, TCS also hired around 44,000 freshers during FY26.

Infosys’s LTM attrition stood at 12.6 percent in FY26, compared with 14.1 percent in FY25 and higher levels in FY24. The company also hired more than 20,000 freshers in FY26, while its employee base increased during the year. This contrasts with TCS, where attrition remained around similar levels but headcount declined sharply.

The comparison shows that both companies continue to replace and add talent even as AI adoption increases. TCS’s sharper headcount reduction therefore appears linked to a combination of changing skill requirements, demand conditions and workforce restructuring, rather than AI alone.

AI or Demand Slowdown?

This is where the data becomes important for investors. TCS’s sharp workforce reduction happened during FY26, when its constant currency revenue declined 2.4 percent, and management highlighted changing demand and client priorities. At the same time, the company continued investing in AI and hiring freshers. 

Infosys provides a useful comparison. Its workforce increased during FY26 while profit also grew. This means the industry-wide data does not show a simple pattern where higher AI adoption automatically leads to fewer employees.

The available numbers therefore point to a combination of demand conditions, workforce restructuring, and changing skill requirements, with AI increasingly influencing the type of work and skills required.

TCS Union Complaints

TCS’s workforce reduction also led to complaints from the Karnataka State IT/ITeS Employees Union under the Industrial Disputes Act. The union raised concerns over the workforce reduction and sought labour department intervention. The complaints should be treated as context rather than as proof of a legal violation, since the matter involved allegations and a labour process.

Conclusion

TCS and Infosys are showing two different workforce trends as AI reshapes the IT industry. TCS reduced its headcount sharply in FY26, while Infosys increased its employee base alongside profit growth. TCS also continued fresher hiring and expanded its AI business, showing that the workforce reduction was not simply about replacing employees with AI.

The comparison therefore points to different business conditions at the two companies. TCS’s sharp headcount reduction came alongside weaker FY26 profit and restructuring, while Infosys continued to expand its workforce. For investors, the key factor to watch will be whether TCS can turn its lower employee base and growing AI business into stronger profit growth, while Infosys balances continued hiring with productivity gains.