Too early to decouple revenue, headcount, says Coforge CEO Sudhir Singh

Mid-tier IT services company Coforge believes it is too early to call out whether the industry has started decoupling revenue from headcount growth due to the impact of artificial intelligence (AI), which is expected to improve productivity and efficiency. 

 

The inextricable link between revenue and employee strength is a metric that has been used for the last three decades as a barometer of the health of the $284 billion industry. 

 

This comes in the backdrop of the company reporting revenue per employee (RPE) of $70,000 for the second quarter September 30, 2025. The company, however, did not share the previous year’s number. 

 

“I don’t want to at this stage. I will exaggerate the impact. There has been good positive movement but it’s still early days. I don’t want to put a stake on the ground and say that this decoupling has started happening,” chief executive officer (CEO) Sudhir Singh told Business Standard during an interaction. 

 

When asked how long it will take for the effect to set in, Singh said it will take the next few quarters to see what direction these metrics move in. “This is a promising start but not at a stage where we can say it’s already started happening.” 

 

IT companies, whose operating model resembles a pyramid, have long relied on this structure for growth as more employees at the base or junior level meant an army of engineers ready to be deployed at will whenever the firm won a project. 

 

However, generative AI (Gen AI) and agentic AI has posed serious questions about the viability of that model going ahead because agents have been writing codes and performing many technical jobs that engineers with few years of experience were expected to perform. 

 

HR experts, headhunters, and analysts are still trying to figure out the gains services firms are making by using AI and AI agents in their processes. Any substantial gains made should inevitably make them go slow on hiring -- the ideal scenario that analysts expect to happen in the not-so-distant future. 

 

Singh said the company is changing the delivery of technology services by embedding AI early on in projects through its proprietary platforms such as CodeInsightAI, BlueSwan and Forge-X. Forge-X, for example, is the platform for portfolio modernisation, applications development and maintenance. CodeInsightAI helps in software reverse engineering. 

 

Coforge, however, said it will continue to hire and not slowdown unlike what LTTS said earlier this month. Coforge added 709 people during the last three months and its headcount stood at 34,896 as of September. It added about 3,000 people in the last one year. 

 

“We will continue to hire. We have found that the new cohort of engineers coming out of colleges, where the culture has now pivoted to participating in hackathons and discovering solutions on the fly, meshing together technologies and not just getting straightjacketed into one technology stream. It is a very big change from a DNA perspective compared to the certification culture of earlier years,” Singh added.