Globant booked $614.4M in the second quarter. A year earlier it booked $614.2M.
The difference is $237,000. On a $600M base that is not a difference.
The line that moved sits at the back of the August 13 release, in the supplemental table that nobody reads out on the call. Five quarters of headcount, in order: 30,084, 29,020, 28,773, 28,510, 27,411. Globant ended June with 2,673 fewer employees than it had a year earlier, down 8.9%, and it has now printed five consecutive quarterly declines.
Same revenue. 2,673 fewer people producing it.
Gross margin should have gone up. It went down.
The margin is the tell
IFRS gross margin came in at 33.9% against 35.4% a year ago, off 150 basis points. On the non-IFRS adjusted line, which strips depreciation and equity compensation, the drop is wider: 36.5% against 38.1%.
Cost of revenues says the same thing without the percentages. $396.5M in Q2 2025. $406.2M in Q2 2026. Up 2.4%.
Put the three facts in one row. Headcount down 8.9%. Revenue flat. The cost of producing that identical revenue up 2.4%. There is one reading that survives: the people who left were cheaper than the people who stayed.
That is the pyramid, and it is how every IT services firm has made money for thirty years. A few senior engineers sit on top of a much larger junior base, the client is billed for the hours of the whole team, and the firm keeps the spread on the cheap layer. Pull out the base and revenue per head jumps, because the denominator lost its cheapest members. Average cost per head jumps too. Margin gets squeezed between them.
So the number everyone will quote from this quarter is not a productivity result at Globant. Revenue per IT professional rose 9.7%, to roughly a $95.9K annualized run rate. Last year, $614.2M was delivered by 28,097 technology, design and innovation professionals, about $87.4K each on an annualized basis. This year, $614.4M was delivered by 25,632, about $95.9K each. The ratio improved because the denominator got more expensive, not because the work got faster.
The pyramid is losing its base.
The billing unit changed
CEO Martín Migoya wrote the load-bearing sentence himself. Globant opened its Glob.AI platform to the entire market the week before earnings, and on it any enterprise can deploy AI Pods and “pay on the output or consumption they receive rather than on the hours behind it.” He followed it with the part that matters for anyone employed in delivery: the company is changing how its services are delivered and how they are priced.
Glob.AI annual recurring revenue reached $52.8M in Q2, up 61% sequentially, with management guiding to no less than $110M exiting 2026. The partner list names Anthropic, Vercel and OpenAI.
When the meter stops running on hours, headcount stops being revenue. Genpact crossed the same line on August 6, when non-FTE revenue passed half of total revenue for the first time in the company’s history. Genpact arrived from the back-office process side in India and the Philippines. Globant is arriving from the Latin American software engineering side. Different work, same repricing.
CFO Juan Urthiague described the quarter as one where the company “proactively optimized our structure” to navigate volatility and to align with its business model transformation. There is an accounting line under that sentence. Business optimization costs ran $32.3M in the quarter, and the footnote states they relate primarily to workforce resizing and office reductions.
Note the calendar. Globant ran a business optimization program starting April 2025 and another starting April 2026. Two years, same month.
The client base is thinning at the bottom too
904 customers generated more than $100,000 of revenue for Globant in the twelve months to June 30. A year earlier that count was 981. Accounts above $1M went from 339 to 331.
In the same release, revenue from the top 50 clients grew 6.9% year over year, and the top ten went from 29.3% of revenue to 30.6%.
Large accounts expanding, small accounts falling away. For delivery staff those two lines converge on one outcome: fewer distinct projects, and the surviving roles concentrated inside a handful of long-lived accounts.
The guide finishes the sentence
If this were an efficiency story, the guide would be up.
Globant guided Q3 revenue to $607M–$615M, a year-over-year decline of 1.6% to 0.3%. Full-year 2026 lands at $2,428M–$2,462M, from down 1.1% to up 0.3%.
Restated: cut 2,673 people, hold revenue flat, then guide next quarter negative.
The savings did not stay in the building. They went out with the new pricing model, to the buyer.
The contrast case published the day before. Cisco closed fiscal 2026 on August 12 with revenue up 18%, non-GAAP operating expenses up 5%, and its CFO naming earnings per employee in the prepared remarks three months after cutting roughly 4,000 people. Both companies shrank headcount. Cisco’s margins went up and Globant’s went down, and the reason is what each one sells. Cisco sells hardware and subscriptions, where people are a cost line. Globant used to sell the people.
Who is actually exposed
Globant closed the quarter with 27,411 employees, 25,632 of them technology, design and innovation professionals. That technical population is down 2,465 year over year.
The ratio is the number to hold onto. Technical staff were 93.4% of the company a year ago and 93.5% today. It did not move. This was not a back-office trim with the delivery organization left intact; the delivery organization is where the cut landed.
Geographically, 52.8% of revenue came from North America, 20.8% from Latin America with Argentina the top country, 20.9% from Europe with Spain the top country, and 5.5% from new markets. The pressure sits on the nearshore delivery belt — Argentina, Uruguay, Colombia, Mexico, Spain, Romania — and inside it on junior and mid-level engineering, QA, front-end and delivery management.
The exposure mechanism is not a layoff event. It is a vendor changing its unit of account. Once a client buys output instead of hours, the vendor has no reason to carry a bench, and the bench is the door junior engineers walk through to enter this industry.
Two things to watch on timing. April, because Globant has now opened a business optimization program in that month two years running. And the Q3 guide, which is negative, meaning nothing in this plan calls for backfilling what was cut.
As for why the base goes before the top, Stanford’s Digital Economy Lab published the mechanism the day before this print: the roles contracting fastest are the ones built on knowledge that has been written down, while tacit apprenticeship knowledge holds up better. We covered the revised paper on August 12. The base of an IT services pyramid is where the written-down work lives.
One cohort point for scale. India’s five largest IT services firms went net negative on headcount across FY26, down 7,389 in aggregate, the first decline in over a decade. Globant shed 2,673 by itself in twelve months, more than a third of what all five did combined.
Sources
- Globant investor relations, Globant Reports 2026 Second Quarter Financial Results, August 13, 2026. Headcount series, cost of revenues and guidance ranges are from the release and its Schedule of Supplemental Information.
