India’s technology sector is undergoing a fundamental transformation as artificial intelligence reshapes delivery models and client expectations. According to a recent statement by industry body Nasscom, the IT sector is at a critical inflection point, with companies likely to pursue workforce rationalisation in the near term as they adapt to rapid changes in the global tech landscape.
Structural shifts call for leaner, agile operations
The statement follows Tata Consultancy Services’ decision to cut around 12,000 mid- and senior-level jobs, equivalent to 2% of its workforce, as part of broader efforts to embrace automation and AI. Nasscom did not explicitly link its statement to TCS but noted that the industry is moving away from legacy skillsets and people-heavy service models toward product-aligned, AI-native approaches.
Client expectations are also shifting. Speed, innovation, and contextual domain expertise are becoming crucial differentiators. In response, companies are reassessing their organisational structures to enable agile delivery, which could lead to downsizing of redundant roles while opening opportunities for high-skill functions.
AI skilling drives new talent priorities
Despite the churn, Nasscom remains optimistic about long-term growth. The industry body revealed that over 1.5 million professionals have already been trained in AI and GenAI by Q4 FY25. Additionally, more than 95,000 employees across large firms now hold advanced certifications in specialised areas like embedded AI, autonomous cloud, and AI for finance.
Hiring strategies are evolving to favour domain specialists who can apply AI tools within industry-specific contexts. This marks a departure from traditional bulk hiring of software engineers, signalling a shift toward value-chain integration and vertical depth.
Continuous reskilling becomes essential for resilience
Nasscom reiterated the need for continuous upskilling to future-proof the workforce. While rationalisation may be necessary in the short term, the industry is expected to create new roles in areas such as AI governance, cybersecurity, machine learning operations (MLOps), and ethical AI.
The association underscored that past disruptions—from Y2K to cloud computing—have consistently led to new opportunities. The current AI wave, it argued, is no different. Companies that invest in reskilling and agile workforce models are likely to emerge stronger as demand stabilises globally.
