In a bid to defend margins and improve utilisation rates, the top IT services companies including Tata Consultancy Services (TCS), Wipro, HCL Tech, Accenture and Infosys have reduced the bench sizes in a year and a half. According to Money Control report, the main reason for this being slow growth in revenue.
In the IT industry, Bench Time refers to the employees who are on payroll but aren’t assigned any major projects of the company. These employees serve as a backup and they are assigned projects whenever the demand from the client arises.
Similarly the numbers for bench holding sizes have plunged significantly. According to the reports from UnearthInsight, a market intelligence firm, the bench time has reduced from 35-45 days compared to an average of 45-60 days in FY20 and FY21. The same trend is likely to continue even in 2026.
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With the IT companies demand for niche skills related to AI, machine learning, and cloud computing, employees with 9 to 14 years of experience with legacy skills are under the risk of bench layoffs.
This is due to hyper-hiring in 2021 and 2022 which lead to lower utilisation rates, the report quoted Kamal Karanth, co-founder of Xpheno. “The resizing and rebalancing headcounts since 2023 amidst revenue and margin pressures hit the bench volumes first to move the utilisation rates up again. Enterprises have since gone for a mix of staffing consumption for just-in-time workforce and subcon arrangements for longer tenures,” he noted.
The data from Xpheno showed, on a 2-year basis, the estimated bench size reduction is nearly 22 percent. While the current utilisation rates stayed in the optimal mid to late 80 percent range for IT firms, estimated bench sizes have shrunk by 15 percent compared to size a year ago.
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