TCS layoffs: NASSCOM warns of workforce restructuring in IT sector
What's the story
The National Association of Software and Service Companies (NASSCOM) has warned of potential workforce rationalization in the IT sector. This comes after Tata Consultancy Services (TCS), India's largest software exporter, announced plans to lay off over 12,000 employees in FY26. The move is part of a larger trend where traditional skill sets are being re-evaluated amid changing technological demands and client expectations.
Job cuts
TCS to lay off 12,200 employees
TCS, which currently employs over 613,000 people globally, plans to cut about 2% of its workforce in phases throughout FY26. This will affect some 12,200 employees. The company's CEO K Krithivasan had earlier cited an increasing skill gap and difficulties in redeploying mid- and senior-level employees as reasons for the layoffs.
Industry shift
Tech industry at turning point
In light of TCS's decision, NASSCOM has said that the tech industry is at a turning point as AI and automation become central to business operations. The organization expects some transitions in the coming months as companies move toward product-aligned delivery models. This shift might reshape traditional service delivery frameworks and lead to workforce rationalization as traditional skill sets are re-evaluated.
Call for action
NASSCOM urges tech industry, Centre to collaborate
NASSCOM has requested the tech industry, academia, and government to work together in bridging this skilling divide. The organization stressed that talent development should be a national and business imperative. This is vital for sustaining India's technological leadership in the AI era. The Ministry of Electronics and Information Technology (MeitY) is closely monitoring developments surrounding TCS and expects industry-academia collaboration on skilling/re-skilling issues.
Future outlook
Hiring trends expected to evolve
NASSCOM has also predicted that hiring trends shall continue to evolve, with a growing demand for deep, specialized expertise. The organization noted that there is no one-size-fits-all solution and each enterprise will have to navigate this transition based on its unique strategic needs. As of Q4 FY25, over 1.5 million professionals have been trained in AI and GenAI skills across levels, according to NASSCOM data.