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High technology industry

Nasscom Warns of More Workforce Rationalization in the IT Sector

Strategic Insights

— 2 min read

The Indian IT industry is at an inflexion point, with Nasscom, the apex industry body, cautioning about more workforce rationalization in the coming months. This warning comes in the wake of TCS's announcement to lay off over 12,000 employees in FY26. India's top IT services companies have delivered single-digit revenue growth in Q1FY26, amidst global macroeconomic stability and geopolitical tensions affecting global tech demand and delayed client spending.

Key Takeaways:

  • Nasscom expects workforce rationalization in the coming months as organizations pivot towards product-aligned delivery models, driven by client expectations around agility, innovation, and speed.
  • The shift may lead to workforce rationalization as traditional skillsets are re-evaluated, with a focus on high-value talent in emerging domains such as AI, cybersecurity, digital engineering, and more.
  • Hiring trends in the sector will continue to evolve with increasing demand for specialized expertise, and a recalibration in hiring with quality taking precedence over quantity.
  • TCS has let go of 2% of its global workforce, part of the company's strategy to become a "future-ready" organization focusing on technology, AI deployment, market expansion, and workforce realignment.
  • Nasscom has observed significant steps in preparing the talent base for the shift, with over 1.5 million professionals trained in AI and GenAI skills across levels, and advanced AI skilling initiatives touching more than 95,000 employees in leading listed firms.
  • The industry body has called for a shared commitment between the industry, academia, and the government to bridge the skilling divide.

Statistics:

  • 12,000: The number of employees TCS plans to lay off in FY26.
  • 2%: The percentage of TCS's global workforce let go by the company.
  • 1.5 million: Number of professionals trained in AI and GenAI skills across levels.
  • 95,000: Number of employees in leading listed firms who have been trained in advanced AI skills.
  • 20%: Estimated upswing in demand for high-value talent in emerging domains such as AI, cybersecurity, digital engineering, and more.
  • 9,000: Number of employees Microsoft plans to cut, estimated at around 4% of its workforce.
  • 75,000: Intel's workforce at the end of the current year, down 31% from the previous year.

Sources:

  • Nasscom: "Industry body Nasscom calls for shared commitment to bridge skilling divide amid IT job market shift" by Our Special Correspondent Nasscom.
  • ABP Private Limited: "Microsoft to lay off around 9,000 employees, Intel plans to end year with 75,000 workers" by Copyright 2025 ABP Private Limited, distributed by Contify.com.

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