IT bench strength plunges to 10% in 2025 as companies abandon buffer model

Experts note that the future workforce model will be lean, fluid, and unforgiving of idle capacity. They also say that AI does not restore the bench; it accelerates its extinction. | Photo Credit: istock.com

In a year marked by layoffs and restructuring of the workforce, India’s large-sized IT services firms halved their bench strength in 2025 compared to the peak levels in 2024, due to change in client contracts and a structural reset in the sector, according to data made available to businessline by hiring solutions provider CIEL HR. Bench strengths are seen compressing further in the next 1-2 years.

Bench strength shrank to 10-12 per cent of total headcount in 2025 from 18-20 per cent levels in 2024, as per the data.Most large IT services firms actively reduced bench tenure, capping idle time at 30–45 days before redeployment, reskilling or role reassessment. This reflects tighter internal utilisation metrics and stronger accountability at the business-unit level, Ganesh S Padmanabhan, VP - Recruitment Business at CIEL HR solutions firm, told businessline.

Mid-cap IT firms are running even leaner benches, due to higher dependence on project-linked hiring, faster deployment cycles and flexible staffing models.

“While slower deal flow and cautious discretionary spending have played a role, firms have simultaneously tightened utilisation targets, reduced buffer hiring, and moved away from carrying large generalized benches to protect margins,” said Rajesh Palviya, Senior Vice President- Head Research, Axis Securities.

Client sentiment

According to CIEL, clients increasingly favour outcome-based pricing, shorter project cycles, and faster ramp-ups, reducing the tolerance for long lead times and idle capacity. This leads service providers to closely align workforce planning with real-time demand rather than future demand assumptions.

“This points to a structural reset in the IT talent model. AI-led productivity gains, cautious client spending and tighter deal economics are pushing organisations toward leaner, skill-aligned workforce planning, moving away from the traditional model of maintaining large, generic benches as a hedge against demand volatility,” said Padmanabhan.

Firms have also changed how they interpret demand risk, with enterprises focusing on narrowed outcome-linked deals with slower ramp up, said Sanchit Vir Gogia, Chief Analyst and Founder of Greyhound Research. Execution timelines have stretched across quarters, creating a growing gap between deal signing and revenue realisation.

“This ramp latency made large benches economically indefensible even when pipelines looked healthy. Carrying idle talent no longer aligned with margin protection or shareholder expectations,” said Gogia.

Reskilling

Companies are selectively retaining skills-based micro-benches in areas such as cloud, data, cybersecurity, AI engineering and ERP transformation. Legacy skill benches, particularly in commoditised technologies, have seen the sharpest corrections, said Greyhound data. Employees are now expected to actively self-position for projects, reskill, and demonstrate near-instant billability.

“For employees, this trend [of lower bench strength] signals that extended bench periods are no longer viewed as neutral waiting time but as a phase requiring rapid reskilling, redeployment, or role transition, with greater emphasis on niche and project-ready capabilities,” said Palviya.

AI’s impact

Greyhound expects AI-led pivots to further compress benches over the next 1-2 years. AI enables firms to deliver the same scope faster and with fewer people. This reduces the need for standby capacity and undermines the economic rationale for carrying a bench. At the same time, AI adoption is eliminating lower complexity roles at the base of the employee pyramid, particularly those traditionally filled by freshers or junior staff.

The research firm also challenged the idea that AI programmes will automatically create hiring waves, pointing out that firms are absorbing AI work through internal reskilling and selective specialist hiring, not through mass recruitment. Confidence in running near zero bench has already been operationally validated.

“The future workforce model will be lean, fluid, and unforgiving of idle capacity. AI does not restore the bench. It accelerates its extinction,” said Gogia.

Published on December 21, 2025