Bengaluru :
In recent years, leading Indian IT companies like Tata Consultancy Services (TCS), Infosys, Wipro, HCLTech, and Accenture have significantly reduced their bench sizes.
Tough Decisions in Uncertain Times
With sluggish revenue growth, many top IT firms have reduced their team sizes, while others focus on protecting margins and improving utilization rates.
Industry experts and staffing firms note that not only have bench sizes shrunk, but the duration employees spend on the bench has also dropped significantly.
In the IT services industry, “benching” refers to employees on the payroll who are not yet assigned to active projects. These employees serve as a backup to meet sudden client demands.
Currently, the average bench time has reduced to 35-45 days, down from 45-60 days in FY20 and FY21, when the sector experienced strong double-digit revenue growth, according to data from market intelligence firm UnearthInsight.
Experts predict that this trend is likely to continue in FY26 as well.
Employees at Risk of Bench Layoffs
Notably, professionals with 9 to 14 years of experience in legacy skills face a higher risk of bench layoffs.
Meanwhile, there is a growing demand for niche skills such as artificial intelligence, machine learning, and cloud computing.
There has been a significant reduction in bench time, with benched employees, who once accounted for 10-15% of the average headcount in IT companies, now reduced to just 2-5%, according to staffing firm TeamLease Digital.
Kamal Karanth, co-founder of staffing firm Xpheno, explained that the high bench volumes in 2022 and early 2023 were a result of the aggressive hiring in 2021 and early 2022, which led to lower utilization rates.
He further mentioned,
“Since 2023, companies have resized and rebalanced their headcounts in response to revenue and margin pressures, with bench volumes being reduced first to improve utilization rates. Enterprises have since adopted a mix of just-in-time staffing and subcontracting arrangements for longer tenures.”
“Companies have increased their utilization rates from 70-75% to 80-85%. Attrition has also decreased from 28-30% to 11-13%. When companies retain employees, they don’t need to utilize benched resources as much.
With Global Capability Centers (GCCs) hiring directly from the talent pool, IT firms face tougher competition, prompting them to adopt leaner, project-specific hiring models,” said Krishna Vij, business head of IT staffing at TeamLease Digital.
Currently, IT firms are maintaining utilization rates in the mid to late 80% range.
At the same time, bench sizes have reduced by 15% compared to last year and by 22% over the past two years, according to data from Xpheno.
To ensure faster deployment, top firms like TCS maintain a slightly higher lateral bench to respond to client demands.
With a slowdown and delayed deal closures, IT service firms are focusing on cost optimization, said the founder and CEO of UnearthInsight.
