TLDR: L&T Technology Services (LTTS) projects a decrease in its third-quarter headcount, attributing the shift to enhanced operational efficiency and automation powered by Artificial Intelligence. This move signifies a strategic decoupling of revenue growth from workforce expansion, as AI tools enable the company to achieve more with fewer personnel.
L&T Technology Services (LTTS), a prominent mid-tier IT services firm specializing in engineering research and development, is forecasting a reduction in its workforce during the third quarter of the fiscal year. This anticipated headcount drop is a direct consequence of the company’s increasing reliance on Artificial Intelligence (AI) and automation, which are significantly boosting operational efficiency and productivity.
Amit Chadha, Chief Executive Officer and Managing Director of LTTS, highlighted that AI is enabling the company to achieve more with less, effectively decoupling the traditional linearity between revenue growth and headcount addition. This strategic shift is driven by the automation of various tasks and processes across the organization.
LTTS is among the first companies in the IT services sector to openly acknowledge this evolving dynamic, as human resources experts, headhunters, and industry analysts closely monitor the productivity gains realized through the adoption of AI and AI agents. The company’s proactive embrace of AI-driven automation is expected to lead to substantial gains, influencing its hiring trajectory.
During the third quarter of FY25, LTTS reported robust financial performance, with revenue reaching ₹26,530 million, marking a 3.1% quarter-on-quarter increase and a 9.5% year-on-year growth. In USD terms, revenue stood at $311.9 million, up 1.7% QoQ and 7.3% YoY, with constant currency growth at 3.1% QoQ and 8.7% YoY. The company also achieved an EBIT margin of 16.2% (excluding one-time non-operational M&A expense) and a net income of ₹3,224 million.
Further underscoring its commitment to AI innovation, LTTS inaugurated the NVIDIA AI Experience Zone at its Bengaluru design hub during the quarter. This initiative aims to enhance AI capabilities for clients in the Mobility and Tech sectors. The company’s dedication to AI-led innovation is also reflected in its patent portfolio, with 174 patents filed specifically for AI/Generative AI applications. LTTS teams are actively advancing Agentic AI, an autonomous system designed to facilitate automation, autonomous operations, and improved decision-making.
The company’s ‘Go Deeper to Scale’ strategy, involving focused investments in the first half of the current fiscal year, has begun to yield positive results. Q3 saw the highest-ever deal booking Total Contract Value (TCV), including eight large deals across various segments, such as one USD 50 million deal, two USD 35 million deals, two USD 25 million deals, and three USD 10 million deals. The large deal pipeline has also seen significant additions, driven by customer engagements in both new-age product and platform development and business transformation.
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LTTS’s strong performance was particularly evident in its Tech and Sustainability segments, which experienced 11.1% and 4% sequential growth, respectively, indicating improving demand outlooks in these areas. This growth was supported by ramp-ups in MedTech, hyperscalers, communication providers, and demand for plant modernization and automation.
