Leading IT services firms such as Tata Consultancy Services, Wipro, HCL Tech, Accenture, and Infosys have been reducing bench sizes over the past year and a half in an effort to protect margins and enhance utilisation rates. A key factor driving this trend is the slowdown in revenue growth, as highlighted in a report by Money Control.
In the IT sector, bench time refers to employees who remain on the payroll but are not actively assigned to major projects. These employees act as a reserve workforce and are allocated projects based on client demand. Over recent years, the duration of bench time has seen a notable decline. Reports from market intelligence firm UnearthInsight indicate that bench time has dropped to 35-45 days from the 45-60 day average recorded in FY20 and FY21, with a similar pattern expected to persist through 2026.
As demand increases for specialised skills in artificial intelligence, machine learning, and cloud computing, professionals with 9 to 14 years of experience in legacy technologies face a higher risk of bench layoffs. The rapid hiring surge in 2021 and 2022 led to lower utilisation rates, prompting companies to reassess workforce strategies. Kamal Karanth, co-founder of Xpheno, noted that since 2023, firms have been adjusting headcounts due to revenue and margin pressures, with bench volumes being the first area affected to restore higher utilisation rates. Businesses have since adopted a mix of staffing approaches, including just-in-time hiring and subcontracting for longer-term roles.
According to data from Xpheno, bench sizes have seen a significant decline, with an estimated 22 percent reduction over two years. Although current utilisation rates for IT firms remain in the optimal mid-to-late 80 percent range, estimated bench sizes have decreased by 15 percent compared to the previous year.
