Beena Parmar

The typical IT playbook of hiring software engineers offshore to drive tech projects is being rewritten with AI, Shristi Achar and Beena Parmar analyse.

India's software services industry is finding new growth in data centers and AI. Companies like HCLTech, TCS, Accenture, and Cognizant are investing heavily in AI platforms and infrastructure. This strategic shift aims to position them as end-to-end partners.

As enterprise spending moves from compute and infrastructure towards AI platforms, agents and business applications, IT firms can leverage these

While contract renegotiations have typically taken place just ahead of the time of renewal across the $315 billion software services industry, clients are now reopening even ongoing engagements to capture AI-led efficiencies sooner.

Persistent Systems' shares came under pressure on Monday with investor concerns over the deal's size, execution risks and the uncertainty around integration. The shares ended 11.3% and 11.2% lower at ₹4,292 and ₹4,298 per share on the NSE and BSE, respectively.

This shift is driven by significant productivity boosts from AI, forcing a re-evaluation of traditional pricing.

Persistent Systems CEO Sandeep Kalra confidently addresses investor concerns after a significant drop in stock value due to the company's $1.3 billion acquisition of Nagarro, promising growth and long-term benefits for stakeholders.

Analysts widely expect companies in the sector to lower full-year growth guidance, as client spending remains constrained by macroeconomic uncertainty, AI-driven pricing pressure and geopolitical headwinds.

Between 10,000 and 15,000 tech professionals faced so-called silent layoffs till May, according to staffing firm TeamLease, which projects the full-year toll at 25,000-35,000. CIEL HR Services estimated 2026 job losses so far at about 12,000, with the year potentially ending with layoffs between 18,000 and 21,000, taking the combined 2025-2026 hit to as much as 43,000 jobs.

Financial services and technology, which together account for 57% of revenue for India’s sixth largest IT service firm, each grew more than 3% sequentially in the first quarter. With this, Lambu said, LTM expects the artificial intelligence-led revenue deflation to be behind the firm.