After 19,000 in the previous quarter, TCS's headcount decreased by 11,000 in Q3

Tata Consultancy Services (TCS)

reduced its workforce by 11,151 employees during the October–December quarter, marking a second consecutive quarter of headcount decline, as the country’s largest IT services company sharpened its focus on utilisation and talent optimisation.

At the end of the December quarter, TCS’s total employee count stood at 582,163, down from 593,314 in the September quarter, the Mumbai-headquartered firm said. In the previous quarter, TCS had reported a net reduction of 19,755 employees, taking its workforce below the six-lakh mark.

The company’s voluntary attrition rate on a trailing 12-month basis was 13.5% in IT services, broadly stable compared with the prior quarter, as the company continued to recalibrate staffing levels amid a cautious demand environment.

Reiterating its long-term strategy, K Krithivasan, chief executive officer and managing director, said TCS remains focused on becoming an AI-led technology services company. “Our AI services now generate $1.8 billion in annualised revenue, reflecting the significant value we provide to clients through targeted investments across the entire AI stack, from infrastructure to intelligence,” he said.

The headcount reduction comes even as TCS posted modest revenue growth in the third quarter of FY26. On Monday, after market hours, the company reported 2.0% quarter-on-quarter growth and 4.9% year-on-year growth in consolidated revenue. In dollar terms, revenue stood at $7.5 billion, up 0.6% sequentially but down 0.4% year-on-year, while constant currency revenue rose 0.8% quarter-on-quarter and declined 2.6% from a year earlier.

Operating margin for the quarter came in at 25.2%, with net margin at 20.0%. Cash flow from operations remained strong at 130.4% of net profit.

On the demand front, TCS reported an increase in its large client base, with $100-million-plus clients rising by two, $20-million-plus clients increasing by eight, and $1-million-plus clients growing by 23 on a sequential basis. The company’s order book total contract value for the quarter stood at $9.3 billion, led by North America ($4.9 billion), followed by BFSI ($3.8 billion) and consumer business ($1.4 billion).

Despite these additions, management signalled that the broader demand environment remains cautious, prompting continued emphasis on productivity, cost discipline and selective investments in high-growth areas such as artificial intelligence.