More Tech Layoffs Coming? Nasscom Cites AI Shift, Warns of ‘Workforce Rationalisation’ After TCS Layoffs

The National Association of Software and Service Companies (Nasscom) has signalled a phase of workforce realignment across the Indian IT sector, citing a dramatic shift towards AI and automation-driven operations. The statement comes close on the heels of Tata Consultancy Services’ (TCS) announcement to cut over 12,000 jobs in FY26.

AI Push to Reshape Traditional Roles
In its official statement titled “Nasscom Statement on Workforce Realignment and Industry Transformation”, the industry body noted that, “The tech industry is at an inflection point, as AI and automation move to the very core of how businesses operate.”

This change, Nasscom said, is prompting organisations to reimagine delivery models, prioritising agility, innovation, and speed. “Over the next several months, we anticipate some transitions as organisations pivot toward product-aligned delivery models... In the near term, [this] may lead to some workforce rationalisation as traditional skillsets are re-evaluated,” it added.

TCS to Let Go of 12,200 Employees
India’s largest software exporter, TCS, which employs 6,13,000 globally, announced plans to reduce its workforce by 2 percent—translating to roughly 12,200 employees—in phases during FY26. TCS is an active member of Nasscom.

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Skilling the Future Workforce
Despite the short-term shakeup, Nasscom remains optimistic about the long-term opportunities the shift could create. “Every wave of disruption brings new roles, new value chains, and new opportunities,” the body said, adding that upskilling and cross-skilling are essential for building resilient, future-ready talent pools.
 

The industry has made significant progress on this front. “As of Q4FY25, over 1.5 million+ professionals have been trained in AI and GenAI skills across levels,” Nasscom revealed. Advanced AI skilling has reached more than 95,000 employees in leading listed firms, covering areas like AI-native cloud, embedded AI, and applied intelligence.

Call for Deeper Collaboration
Looking ahead, hiring will tilt toward deep, specialised talent. “There is no one-size-fits-all solution—each enterprise will navigate this transition based on its unique strategic needs,” the statement said.

“What is critical... is a shared commitment to bridge the skilling divide and embed talent development as a national and business imperative central to sustaining India's technology leadership in the AI era,” Nasscom said

Calling for joint efforts between industry, academia, and government.