Nasscom warns of more job cuts in the IT sector. Nasscom, the sector’s apex body, cautions about continued workforce rationalisation in the coming months. This warning follows Tata Consultancy Services (TCS) announcement to lay off over 12,000 employees.
The development comes amid a period of subdued growth, as India’s top IT services firms reported single-digit revenue increases in Q1FY26. The slow pace is largely attributed to global macroeconomic uncertainties and geopolitical tensions, which have dampened demand for tech services and delayed client spending.
With the industry at a critical transition point driven by growing adoption of AI and automation, Nasscom stated, “In the months ahead, we expect a shift as companies move towards product-aligned delivery models to meet evolving client expectations for agility, innovation, and speed. This transformation may temporarily result in workforce reductions as legacy skillsets are reassessed.”
The industry body also noted that hiring patterns are changing, with growing demand for niche, high-value skills. “There’s no universal approach, each company will adapt based on its strategic goals,” it said.
TCS said that cutting around 2 per cent of its global workforce is part of its broader plan to become a more agile, future-ready organisation, prioritising technology investments, AI integration, market growth, and workforce realignment.
The company’s shares fell 0.73 per cent on Tuesday to Rs 3,056.55 on the BSE, wiping out over Rs 28,000 crore from its market valuation over two days following the layoff announcement.
Meanwhile, Nasscom highlighted efforts underway to upskill the industry workforce. By the end of Q4FY25, over 1.5 million professionals had received training in AI and generative AI, including 95,000 employees from top-listed firms who underwent advanced skilling.
Nasscom emphasised the importance of collaboration among industry players, academia, and the government to address the skill gap and prepare the workforce for the evolving tech landscape.
A Global Trend
This workforce downsizing isn’t unique to India. Globally, tech giants like Microsoft and Intel have also announced job cuts. Microsoft is reducing its workforce by roughly 4 per cent, or about 9,000 jobs, while Intel plans to shrink its headcount to 75,000 by year-end, a 31 per cent drop from the previous year, through layoffs and attrition.
Source – https://www.bwpeople.in/article/nasscom-flags-job-cuts-in-it-as-tcs-plans-major-layoffs-565477