Mid-Cap IT Firms Expand Sales Workforces While Tier-1 Peers Scale Back

Indian IT service providers are taking contrasting approaches to building their sales and customer-facing teams amid macroeconomic challenges and AI disruptions. Data from specialist staffing firm Xpheno shows that mid-cap IT companies have expanded their sales, customer support, and business development teams, whereas their larger Tier-1 peers have moderated their headcounts.

According to the data, the collective headcount for sales and business development functions within mid-cap companies rose 12 percent year-on-year, moving from 8,400 to 9,400. In contrast, the top five Tier-1 Indian IT service firms experienced a 2.4 percent decline in headcount for these functions, dropping from 96,000 a year ago to 93,400.

Industry experts note that larger players are relying more on acquisitions and revenue growth from existing accounts, which reduces the necessity of expanding sales teams at the same pace. Meanwhile, mid-tier firms are actively working to capture emerging opportunities and grow their client bases.

Francis Padamadan, CEO of Xpheno, stated that mid-cap firms are hiring to pursue active opportunities within their current business pipelines. He noted that these companies are also benefiting from the availability of experienced niche talent leaving larger Tier-1 organizations.

The expansion among mid-cap firms extends beyond domestic operations. Overseas sales and business development teams grew by 13 percent year-on-year, compared to an 11 percent increase in India, according to Xpheno's data.

Gaurav Vasu, Founder and CEO of UnearthInsight, explained that inorganic growth now accounts for nearly 50 percent of incremental revenue growth for several companies, diminishing the immediate need to scale sales teams rapidly. He added that vendor consolidation and challenges in securing new logo additions have led companies to prioritize account expansion over hunting for new accounts.

Despite the adoption of automation and artificial intelligence, analysts report that AI has not yet led to a rationalization of the sales workforce. Vasu pointed out that while AI improves the efficiency of sales support, enterprise technology services sales still depend heavily on human relationships, account management, and trust-building.

Kapil Joshi, CEO of IT Staffing at Quess Corp, estimated that 25 to 35 percent of proposal and coordination workflows in sales could be automated or augmented. However, he noted that these efficiency gains do not translate to reduced headcount, as the primary industry shift is toward redesigning workflows to improve sales output per employee.

"This divergence in hiring strategies between Tier-1 and mid-cap IT firms highlights a shift in operational focus. While larger enterprises leverage acquisitions and established accounts for revenue, mid-tier companies are seizing market opportunities by aggressively building their sales infrastructure and absorbing experienced talent. The data confirms that human relationship-building remains central to enterprise technology sales, even as automation streamlines administrative workflows." — Dr. Shishir Gupta, Founder & CEO, StartupLanes