IT cos warn employees to reskill or risk losing jobs amid AI transformation

From TCS to Cognizant, firms pivot to AI-first models, favouring tech-savvy, younger talent and urging workforce to upgrade skills or face involuntary exits

India’s $282 billion IT services sector — long seen as a stable job creator — is witnessing a dramatic shift as companies increasingly demand employees reskill in artificial intelligence (AI), generative AI (Gen AI), and related domains. Amid a muted growth outlook, companies are warning that employees unwilling or unable to adapt may face job losses.

 

Two years of subdued growth, driven by geopolitical tensions, inflation, and macroeconomic headwinds, have compounded pressure on margins. With fresh project inflows limited and cost pressures rising, firms are taking a harder stance on workforce productivity and future readiness.

 

“Learnability” now key to job security 

 

“People are taking effort to train and adapt to current skills. If that is not there, they are not useful to us,” said Kishor Patil, CEO of KPIT Technologies, while announcing the company’s Q1 results. “Our lenses have changed in terms of the quality of hiring from campus and laterals. What is important is learnability.”

 

The wake-up call comes after TCS—the largest IT employer—let go of over 12,000 mid-to-senior managers, citing poor redeployment success despite reskilling attempts. 

 

AI accelerates shift away from traditional roles 

Consulting firm Nasscom warned that traditional skill sets are being reevaluated across the sector. Firms are now hiring for specialised expertise in AI, data science, and cybersecurity, with a preference for younger, more adaptive talent.

 

“AI knowledge for most employees in these organisations is very peripheral,” said Kamal Karanth, founder of staffing firm Xpheno. “Companies are looking at tech skills, domain expertise, and client-specific capabilities.”

 

The shift is also altering managerial responsibilities. Cognizant CEO Ravi Kumar revealed that 30 per cent of its code is now machine-generated, up from 20 per cent six months ago. This trend demands that programmers evolve into “human-in-the-loop” roles, evaluating and guiding AI-generated output.

 

Dual workforce era and performance pressure 

With AI agents gradually becoming co-workers, managers are expected to handle a hybrid workforce comprising human and digital labour. “If you are a programmer, you can be outpaced if you do not use AI,” said Kumar. Cognizant is encouraging employees to embrace AI-powered tooling to stay relevant and productive.

 

Mid-tier firms like Happiest Minds echoed similar sentiments, stating they are actively reviewing their talent base and parting ways with those who resist upskilling or no longer match client requirements.

 

Industry’s shape shifting from pyramid to diamond 

Experts believe this upheaval stems from both economic sluggishness and an irreversible pivot to AI-first operations. “The industry is a pyramid model and you can manage a big workforce if you are growing at 15–20 per cent. But with macro headwinds, companies are calling out the inefficiencies together,” said Pareekh Jain, CEO of Pareekh Consulting and EIIRTrend.

 

“With AI, the whole industry is shifting to a diamond from a pyramid,” he added, highlighting a future where middle-tier, highly skilled professionals take precedence over large base-layer teams of generalists.

 

As AI automates core functions and reshapes delivery models, Indian IT companies are putting employees on notice: embrace change or risk being left behind.