HCL Technologies reported its Q1 FY26 results on Monday, posting a marginal decline in employee attrition while outlining plans to ramp up hiring in the coming quarters, even as overall headcount fell and profits came under pressure.
The IT services major said its attrition rate for the April–June 2025 quarter stood at 12.8%, down 20 basis points from the previous quarter. The figure continues a trend of stabilisation, with attrition hovering between 12.5% and 13% over the past 18 months.
“Attrition at 12.8% is one of the lower levels we’ve seen in recent years,” said Ram Sundararajan, Chief People Officer at HCL Tech. “It shows the work we’ve done on engagement and internal mobility is paying off.”
Headcount Shrinks, But Hiring Plans Expand
Despite lower attrition, overall headcount fell by 269 employees, bringing the total to 223,151. While modest, the drop reflects a cautious approach to hiring amid broader concerns about global IT spending and project delays across key markets.
However, the company has signalled a significant hiring push in the months ahead, especially in areas requiring specialised digital skills. HCL hired 1,984 freshers in Q1 and expects a 15–20% increase in total recruitment for the current fiscal year, compared to FY25.
“We onboarded around 7,850 freshers last year. This year, we aim to go well beyond that,” Sundararajan said, adding that the bulk of new hires will focus on cloud, cybersecurity, data engineering, and AI-related roles.
The dual signal — declining attrition alongside hiring expansion — suggests the company is reshaping its workforce to meet evolving client demands while tightening cost controls.
Q1 Financials: Profit Falls, Revenue Rises
On the earnings front, HCL Tech reported a 9.7% decline in consolidated net profit to ₹3,843 crore for Q1 FY26, compared to ₹4,257 crore in the same quarter last year. The drop comes amid rising delivery costs and ongoing pricing pressures in some markets.
However, revenue rose 8.2% year-on-year to ₹30,349 crore, up from ₹28,057 crore in Q1 FY25. In constant currency terms, revenue growth was more moderate at 3.7%, in line with broader industry trends showing slower expansion as clients hold back discretionary tech spending.
Unlike the mass hiring sprees of the post-pandemic boom, HCL’s current approach prioritises quality over quantity. The management reiterated that new roles will be aligned with business demand and project wins, particularly in verticals such as BFSI, healthcare, and digital engineering.
The company’s Q1 update also aligns with a wider shift across the Indian IT industry, where firms are controlling bench strength, reducing lateral hires, and focusing more on upskilling the existing workforce to meet digital demand.
“We are not just adding numbers for growth’s sake,” said Sundararajan. “We’re hiring with precision — looking for domain-specific expertise to serve clients better.”
HCL’s workforce trends mirror those of other large Indian IT players, who have seen attrition cool and hiring stabilise after a volatile period marked by pandemic-era demand spikes, followed by a slowdown in 2023.
While the company has not issued a specific target for total hiring in FY26, the 15–20% guidance suggests HCL is cautiously optimistic about the deal pipeline in the second half of the year — especially in Europe and select U.S. verticals.