Industry body NASSCOM has issued a cautionary statement, predicting further layoffs in the IT sector in the near future. The announcement follows Tata Consultancy Services (TCS) revealing its plan to let go of 2% of its workforce, amounting to approximately 12,000 employees.
In its official statement, NASSCOM pointed to the transformative impact of AI and automation on the tech sector. “The tech industry is at an inflection point, as AI and automation move to the very core of how businesses operate,” it stated. NASSCOM explained that as companies transition to product-aligned delivery models, driven by increasing demands for agility, innovation, and speed, the result will likely include short-term workforce rationalisation as traditional roles are reassessed.
TCS has reportedly halted lateral hiring and paused annual salary hikes across global markets, signaling broader uncertainty. Social media users have reacted strongly, expressing concerns about the stability of employment in one of India’s most reputed IT firms. Internal reports suggest TCS is now enforcing a 35-day policy for benched employees to secure new projects or face termination, with hundreds affected in cities like Hyderabad, Pune, Chennai, and Kolkata.
Adding to the industry’s challenges, TCS cited geopolitical tensions, muted demand, and macroeconomic instability as reasons for its cost-cutting measures. Onboarding delays for experienced professionals now reportedly exceed 65 days.
Despite these developments, NASSCOM remains optimistic about the long-term outlook. “Every wave of disruption brings new roles, new value chains, and new opportunities,” it emphasized, adding that continuous skilling, upskilling, and cross-skilling will be vital in preparing the workforce for future demands. According to the body, over 1.5 million professionals have already received training in AI and GenAI as of Q4 FY25, with 95,000 employees completing certifications in areas like AI-native cloud and applied intelligence.
NASSCOM also noted that hiring trends will shift toward specialised, deep tech expertise, and that each company will adapt differently, based on strategic priorities.
Meanwhile, financial services firm Jefferies described TCS’s recent decisions as a “canary in the coal mine”, suggesting that firms not embracing AI transformation could face similar disruptions.
