Nasscom, the apex industry body of the IT sector in India, has cautioned about more workforce rationalisation in the coming months in the industry. The observation comes in the wake of TCS announcing its intent to lay off over 12,000 employees in FY26.
This comes at a time when India’s top IT services companies have delivered single-digit revenue growth in Q1FY26, in the backdrop of global macroeconomic stability and geopolitical tensions weighing on global tech demand and delayed client spending.
With the tech industry at an inflexion point, with AI and automation gaining traction, Nasscom said, “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.”
The statement further said that hiring trends in the sector will continue to evolve with increasing demand for specialised expertise. “There is no one-size-fits-all solution; each enterprise will navigate this transition based on its unique strategic needs,” Nasscom said.
“We are seeing a recalibration in hiring with quality taking precedence over quantity. Demand for high-value talent in emerging domains such as AI, cybersecurity, digital engineering, and more continues to remain strong, with an estimated upswing of 20 per cent over the same quarter in FY25,” said Sunil Chemmankotil, country manager, Adecco India, a workforce solutions provider firm.
TCS has said that the decision to let go of 2 per cent of its global workforce is part of the company’s broader strategy to become a “future-ready” organisation, focusing on investments in technology, AI deployment, market expansion and workforce realignment.
TCS scrips at ₹3,056.55 on Tuesday were down 0.73 per cent on the BSE. The IT services major has lost ₹28,148.72 crore from its market valuation in two days following the announcement on Sunday.
Nasscom further said that the IT industry has started taking significant steps in preparing its talent base for this shift.
“As of Q4FY25, over 1.5 million professionals have been trained in AI and GenAI skills across levels. In particular, advanced AI skilling initiatives have touched more than 95,000 employees in leading listed firms,” Nasscom observed.
The industry body also called for shared commitment between the industry, academia, and the government to bridge the skilling divide.
Global trend
Globally, Microsoft and Intel have already announced major layoffs. While Microsoft has reportedly said that it would cut around 4 per cent of its workforce, estimated at around 9,000 employees, Intel has said that it intends to end the current year with 75,000 workers, down 31 per cent from the previous year, through layoffs and attrition.
