Following Tata Consultancy Services’ (TCS) announcement to lay off 12,000 employees—roughly 2% of its global workforce—the National Association of Software and Service Companies (Nasscom) has issued a measured response, framing the development as part of a broader industry transition rather than a crisis.
The apex IT industry body emphasized that the sector is at an inflection point, driven by artificial intelligence (AI), automation, and changing client expectations, and called for a national focus on skilling and workforce resilience.
AI and Automation Reshaping Service Delivery Models
Nasscom noted that the tech industry is undergoing a significant transformation, with AI and automation moving to the core of business operations.
As companies pivot toward product-aligned delivery models, traditional service frameworks and legacy roles are being reassessed.
This shift, while disruptive in the short term, is expected to create new roles, value chains, and opportunities.
“Every wave of disruption brings new roles, new value chains, and new opportunities,” Nasscom stated, urging stakeholders to focus on preparing the workforce for what’s next.
Skilling as a Strategic Imperative Amid TCS Layoffs
To navigate this transition, Nasscom has called for large-scale skilling, upskilling, and cross-skilling initiatives.
The organization stressed that collaboration between industry, academia, and government is essential to bridge the growing skill gap and ensure India’s continued leadership in the global AI race.
As of Q4 FY25, more than 1.5 million professionals in India have received training in AI and GenAI skills.
Out of this group, over 95,000 employees have earned advanced certifications.
These certifications focus on specialized areas such as cloud-native AI, embedded intelligence, and applied AI technologies.
TCS Layoffs Reflect Structural Realignment, Not Just Cost Pressure
Nasscom acknowledged the short-term impact of TCS’s layoffs, noting that mid- and senior-level employees were especially affected.
However, it emphasized that the decision was not driven by immediate financial pressures.
Instead, Nasscom described the move as part of a larger structural realignment within the organization.
TCS CEO K. Krithivasan attributed the decision to skill mismatches and deployment challenges, noting that redeployment opportunities had become limited amid shifting client demands.
Industry analysts, however, warn that the layoffs could signal a broader trend.
Firms like HCLTech have already indicated phased “talent ramp-downs,” and others may follow as AI-driven transformation reshapes demand.
Margin pressures, slower global growth, and client pushback on pricing are also contributing to the shift.
Government and Regulatory Oversight
The Ministry of Electronics and Information Technology (MeitY) is reportedly monitoring the situation closely.
Employee advocacy groups such as NITES have expressed concern about the way the layoffs are being handled.
They allege that the process may involve breaches of labour laws, and have strongly advised affected employees not to resign under pressure.
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