Indian IT services giant Tech Mahindra reported a significant reduction in its workforce during the fourth quarter of fiscal year 2026. The company's headcount fell by 1,993 employees in the January-March quarter, bringing the total number of staff to 147,623. This strategic move is attributed to an ongoing business restructuring initiative designed to enhance operating margins.
The sequential decline in headcount was observed across all three major employee categories. The IT segment saw a decrease of 817 employees, settling at 75,377. The Business Process Services (BPS) division experienced a larger reduction of 1,120 individuals, ending the quarter with 64,330 employees. Additionally, the sales and support staff declined by 56, bringing their total to 7,916.
Workforce Trends and Financial Performance
Despite the workforce reduction, Tech Mahindra's last twelve-month attrition rate marginally eased to 12.1% from 12.3% in the preceding December quarter. IT utilization remained largely stable at 86.1% in Q4 FY26, a slight dip from 86.6% in the previous quarter.
The headcount adjustments coincide with a period of strong operating performance for the company. Tech Mahindra announced a 16.04% year-on-year rise in its consolidated net profit for Q4 FY26, reaching ₹1,353.8 crore, up from ₹1,166.7 crore in the corresponding period last year.
“We are accelerating our transition to an AI-led organisation, embedding AI across services and expanding our capabilities to enhance value delivery for our clients. This is reflected in our highest deal wins in recent years including consecutive quarters exceeding $1 billion. We remain focused on scaling with discipline and are on track to delivering our FY27 commitments,” said Mohit Joshi, Managing Director and Chief Executive Officer of Tech Mahindra.
Revenue from operations also saw an uptick, increasing by 12.64% year-on-year to ₹15,076.1 crore in Q4 FY26. Total expenses rose by 8.18% to ₹13,080.7 crore. The company reported a sharp improvement in profitability, with Earnings Before Interest and Taxes (EBIT) jumping 39.2% year-on-year to ₹7,152 crore. New deal wins for the year reached an impressive $3,794 million in total contract value, marking the company's highest in five years and a 41.6% increase year-on-year.
Chief Financial Officer Rohit Anand commented, “FY26 marked the end of the Stabilization Phase of our transformation journey, with margins expanding for the 10th consecutive quarter despite a challenging macro environment. In line with our disciplined capital allocation framework and commitment to our shareholders, we increased the dividend by over 13%, taking total dividends declared for the year to ₹51 per share, our highest ever.”
This strategic workforce optimization underscores Tech Mahindra's commitment to efficiency and profitability as it navigates a competitive technological landscape and invests in future growth areas like artificial intelligence.