HCLTech CEO C Vijayakumar on Monday announced that the information technology company will execute a restructuring programme for both people and non-people assets during the financial year 2025–26 (FY26), following a 10% drop in net profit in Q1. Vijayakumar later clarified that most of the impact will be on assets and teams located outside India.
“The restructuring plan is mostly for facilities outside India that we have not been utilising. There will be some talent ramp-down in geographies outside India—that’s part of the restructuring plan. This will play out across Q2, Q3, and some parts of Q4,” he told reporters during the post-earnings press conference. He added that the programme will incur a one-time cost, which is already factored into the FY26 guidance.
In its June quarter earnings, the company also revised its revenue guidance for FY26 from 2–5% to 3–5%.
Vijayakumar clarified that the restructuring is not related to any macroeconomic headwinds facing the industry and its peers. According to him, the business environment remains stable and did not deteriorate as was expected at the beginning of the quarter.
Commenting on the company’s lower operating margin of 16.3%, he explained that it was due to a drop in utilisation caused by a delayed ramp-up of a specific project and a one-time impact from a client's bankruptcy, without naming the client. He said the company aims to return to 18–19% margins with the restructuring plan.
HCLTech Eyes Specialised Hiring
During the press meet, HCLTech’s Chief People Officer Ram Sundararajan said the company will focus on fresher hiring based on specialisation rather than volume.
“We are talking about an elite cadre of freshers who will be paid more. These elite candidates will receive higher compensation—services freshers, for example, will be hired at up to 3X the usual pay, and software freshers at up to 4X,” he noted.
After Q1 FY26, HCLTech’s total workforce stood at 223,151, with a net reduction of 269 employees during the quarter. However, the company added 1,984 freshers. The last twelve-month (LTM) attrition rate remained steady at 12.8%, unchanged from the same period last year.
Sundararajan did not provide an exact number on how many new hires would be part of this "elite cadre," but said, “Going by current trends, it will be 15–20%. It could go higher if we find better quality talent.”
The company plans to hire specialised freshers in areas such as data and AI, cybersecurity, and enterprise skills. HCLTech’s CPO also noted that overall hiring in FY26 will be significantly higher than in FY25, when the company hired 7,829 freshers.
Strong Deal Book Expected in Q2
According to C Vijayakumar, HCLTech is expected to post a strong total contract value (TCV) in Q2, following a sharp sequential drop in Q1 FY26. TCV for new deal wins stood at $1.8 billion in Q1, down from $3 billion in the previous quarter.
“We had a couple of large deals in the pipeline that were supposed to close in Q1, but they have been moved to Q2. This delay has nothing to do with macroeconomic factors. Discretionary spending varies across verticals. Clients are investing in AI-led transformation,” the CEO said.
He added that generative AI (Gen AI) has become central to IT services, and the company is investing in an AI-driven data management lifecycle platform. Vijayakumar said the share of Gen AI and AI-led work continues to grow as these technologies become critical to business operations. He also noted that client engagements are scaling up from proof-of-concepts (PoCs) to multi-million-dollar deals.
