IT firms reshape employee pyramids as automation shifts talent economics

Automation is forcing India's largest technology services firms to change their employee structures. Since the start of fiscal 2026-27, seven of the country's 10 largest IT services companies have announced changes to their so-called employee pyramids, the traditional hierarchy of junior staff, managers, and leadership.

At the base of the pyramid sit the junior-most employees with less than 7-10 years of experience, who make up at least two-thirds of the workforce. The middle tier comprises managers, about a third of headcount. The apex is leadership, roughly 5%, said Sushovon Nayak, lead IT analyst at Anand Rathi Institutional Equities.

Cognizant Technology Solutions Corp., Tech Mahindra Ltd, and Sonata Software Ltd are looking to broaden the base of the pyramid. Wipro Ltd, LTM Ltd, and Coforge Ltd are seeking to expand the middle. Tata Consultancy Services Ltd, the country's largest IT player, is reshaping the employee structure based on skills rather than years of experience.

Cognizant's chief executive, S. Ravi Kumar, said the firm was hiring at the bottom. "We are hiring at the bottom of the pyramid from outside, and we're doing it at scale, building bridges from inside," he said during its 29 July post-earnings call. Nasdaq-listed Cognizant has roughly three-fourths of its workforce in India. A Cognizant spokesperson added: "We are re-architecting our talent model into AI-augmented early career talent led by 'player coaches'."

Tech Mahindra has taken a similar stance. "Now, as we see growth coming back, and if we see a lot of this growth coming back on fixed price, transformational programme where we can add freshers, we are very, very flexible in trying and improve the pyramid this year as well," said chief operating officer Atul Soneja, during the company's 22 April call. Richard Lobo, chief people officer, said: "While fresher additions are expected to increase over the next few years, our priority remains in maintaining an optimal balance between fresh and experienced talent, creating a strong talent pyramid."

Sonata Software's management said during its 11 May call that the company "benefited from pyramid management".

Cognizant ended last year with $21.1 billion in revenue, up 7% from a year earlier. Tech Mahindra and Sonata Software ended the last fiscal year with revenues of $6.39 billion and $1.21 billion, up 2% and 1% respectively.

Two Paths to Reshaping

Wipro, LTM and Coforge are taking a different route – hiring more middle-management staff such as project consultants, or reducing junior workforce to create a larger middle tier.

Wipro CEO Srini Pallia, during the company's 16 July call, said the company was looking at how many projects could be run through agents and how many "current existing programs we can agentify".

LTM CEO Venu Lambu said during its 11 July call: "As we have called out in our strategy that the shape of the pyramid, etc., over a period of time will change from the traditional pyramid to a more diamond-shaped structure."

Coforge CEO Sudhir Singh said during its 5 May call: "For Coforge, the demand tailwind is structural and pure. We were built for agility. We have no bloated delivery pyramid to manage."

Wipro ended the last fiscal with a 0.3% on-year revenue decline to $10.48 billion. LTM and Coforge grew 6% and 29% to $4.76 billion and $1.87 billion, respectively.

TCS stands apart with a skill-centric approach, according to management commentary during its 9 July call. The Mumbai-based company ended the last fiscal with $30.02 billion, down 0.5% on-year.

Phil Fersht, CEO of HFS Research, said the strategies point to two distinct approaches. "Some firms are moving towards a diamond by concentrating more talent in experienced engineering, architecture, domain and client-facing roles. Some are becoming more bottom-heavy because they believe AI-native graduates can become productive dramatically faster and at much lower cost than previous generations of freshers."

Shubham Dalia, lead IT analyst at Nirmal Bang Institutional Equities, said this puts additional pressure on freshers to load up on knowledge. "Seeing the pace at which AI models are evolving, human intervention is reducing with new frontier model releases. Hallucinations are almost absent in AI-generated code, and if there are any hallucinations, experienced hands are needed to figure out where the fault is, rather than a fresher right out of college." Dalia added that margins are likely to be under pressure as both cohorts – AI-native freshers and experienced middle managers – would attract a premium.

Nayak expects the pyramid to broaden at the bottom. "The base of the pyramid is expected to broaden, benefiting from an improving mix of forward-deployed engineers, whereas the middle may resultantly shrink in the coming years."