Industry association, NASSCOM, said in a statement that it anticipates more layoffs in the IT sector in the near term. This comes after TCS announced that it would lay off 2 per cent of its workforce, which is essentially 12,000 employees.
“The tech industry is at an inflection point, as AI and automation move to the very core of how businesses operate. Over the next several months, we anticipate some transitions as organisations pivot toward product-aligned delivery models, driven by rising client expectations around agility, innovation, and speed. This shift is likely to reshape traditional service delivery frameworks and, in the near term, may lead to some workforce rationalisation as traditional skillsets are re-evaluated,” it said.
TCS has not only decided to lay off, it has also reportedly frozen lateral hiring and suspended annual salary increases across global markets. Social media has been abuzz, with many stating how this round of layoffs from one of the biggest IT companies has shattered the image of stability in the sector.
However, NASSCOM has said that technology would remain a powerful catalyst in the long run. “Every wave of disruption brings new roles, new value chains, and new opportunities. As industries evolve, continuous skilling, upskilling, and cross-skilling will be critical to building future-ready, resilient workforces,” it said.
The body said that the journey to upskilling workers in the sector has already commenced with over 1.5 million professionals having been trained in AI and GenAI skills across levels as of the fourth quarter of FY25. Advanced AI skilling initiatives, including AI-native cloud, embedded AI, and applied intelligence certifications, have touched more than 95,000 employees, it said.
“Hiring trends will continue to evolve, with increasing demand for deep, specialised expertise. There is no one-size-fits-all solution, each enterprise will navigate this transition based on its unique strategic needs,” the industry body said.
TCS has reportedly communicated its decision to freeze hiring through an internal email citing geopolitical tensions, weak demand, and macroeconomic uncertainty. The hiring freeze and delays in project onboarding, which now reportedly exceed 65 days for experienced hires. Internally, TCS is said to be phasing out hundreds of benched employees in cities such as Hyderabad, Pune, Chennai, and Kolkata. Under a new policy, employees must find a project within 35 days or face termination.
Jefferies, in a recent analyst note, called TCS layoffs and hiring freeze a “canary in the coal mine” moment. The firm noted that layoffs and hiring freezes reflect weak demand and rising costs, warning that companies unable to adapt to AI-led models may face similar challenges.
