Persistent Systems to halt FY27 campus hiring

Persistent Systems will not conduct campus hiring during the financial year 2027, shifting its recruitment strategy to focus entirely on lateral hiring aligned with business demand. Sandeep Kalra, CEO and executive director of the Pune-based IT services firm, said the move is aimed at improving employee utilisation and expanding operating margins, following three quarters of consistent hiring. The company’s workforce currently stands at 28,640, with a headcount increase of 1,100 reported in the April to June quarter.

According to Kalra, the decision reflects a broader drive to hire experienced professionals who can be quickly trained with core skills in artificial intelligence. “We have been hiring, but this is not campus hiring. We are hiring laterals in line with our demand because we want to train people who have the basic skills on AI and be able to move fast in terms of our revenue growth,” he told Moneycontrol. He added that there are no immediate plans to return to campus recruitment, after only a minimal intake in FY26.

CFO Vinit Teredesai noted that Persistent has kept utilisation rates at roughly 88 percent in recent quarters. However, the latest hiring round was larger due to expected deal ramp-ups and anticipated closures in the second quarter, which contributed to a 30 basis point decline in sequential operating margins to 16 percent. The company sees this as a necessary trade-off to support upcoming deal execution.

On the demand front, Kalra said that global clients are maintaining tight budgets on discretionary technology spending, repurposing funds towards AI and automation while overall IT spending grows slowly. “People are not necessarily increasing their budgets. People are recirculating their budgets. The budget increase is not huge, maybe 1 to 2 percent in different segments,” he said. Customers are focusing on boosting productivity through AI and new development projects rather than expanding ‘business as usual’ spending, prompting vendors like Persistent to pursue opportunities to drive efficiencies and capture expanded market share.

Persistent reported its highest ever quarterly deal wins in Q1 FY27, with total contract value at $1.15 billion and annual contract value of $536.8 million. For the June quarter, the company recorded a net profit of Rs 483 crore, up 13.7 percent year-on-year, although profit declined sequentially by 8.7 percent due to foreign exchange losses. Consolidated revenue was Rs 4,303.23 crore, representing a 29.1 percent increase from the year-ago period and up 6.1 percent quarter-on-quarter.

In June, Persistent announced a Business Combination Agreement with German digital engineering firm Nagarro, which is listed on the Frankfurt Stock Exchange. The proposed acquisition is set to merge Persistent’s AI-led engineering and cloud expertise with Nagarro’s European digital, ERP, and customer experience strengths. The combination is expected to create an entity with an annual revenue run rate of $2.9 billion and a workforce exceeding 46,000 across more than 40 countries, providing Persistent with deeper market access in Europe, the Middle East, Turkey, and Japan.

Kalra said regulatory filings for the Nagarro deal are progressing on schedule, with closure anticipated within three to four months. The company plans to provide further updates as the transaction advances.