Tech sector at inflection point, workforce rationalisation likely: Nasscom

Ttechnology will continue to serve as a powerful catalyst for growth, making continuous skilling, upskilling, and cross-skilling, vital to developing future-ready and resilient workforces

With country's largest IT services firm TCS laying off over 12,000 employees, industry body Nasscom on Monday said some "transitions" and "workforce rationalisation" are expected in near term as organisations shift toward product-aligned delivery models in response to increasing client demands for agility, innovation, and speed.

Tata Consultancy Services (TCS) has said it will lay off more than 12,000 employees, or 2 per cent of its global workforce, this year, as part of a broader strategy to become a "future-ready organisation". The impact will be felt most in the middle and senior grades.

Without directly mentioning TCS, Nasscom, in a statement titled "workforce realignment and industry transformation", highlighted that the tech industry is currently at an inflection point, with AI and automation becoming central to business operations.

"Over the next several months, we anticipate some transitions as organisations pivot toward product-aligned delivery models, driven by rising client expectations around agility, innovation, and speed. This shift is likely to reshape traditional service delivery frameworks and, in the near term, may lead to some workforce rationalisation as traditional skillsets are re-evaluated," Nasscom said.

Looking ahead, technology will continue to serve as a powerful catalyst for growth, making continuous skilling, upskilling, and cross-skilling, vital to developing future-ready and resilient workforces.

Nasscom emphasised that deeper collaborations among industry, academia, and government is essential to bridge the skilling gap and embed talent development, which will sustain India's leadership in the AI era.

As of Q4 FY25, more than 1.5 million professionals have been trained in AI and GenAI skills across different levels. Notably, advanced AI skilling initiatives have reached over 95,000 employees in leading listed firms, covering AI-native cloud, embedded AI, and applied intelligence certifications.

"Hiring trends will continue to evolve, with increasing demand for deep, specialised expertise. There is no one-size-fits-all solution each enterprise will navigate this transition based on its unique strategic needs," NASSCOM said.