India’s $283-billion tech sector is standing at the edge of a major transformation, one that's reshaping how companies operate—and who they need to do it. With automation and artificial intelligence (AI) becoming central to business delivery, traditional models of employment are being reconsidered. The latest sign? Tata Consultancy Services (TCS), the country’s largest IT employer, has announced it will trim 2% of its global workforce—roughly 12,000 mid- and senior-level roles.
The move, while significant, isn’t isolated. It reflects a broader shift across the industry. As Nasscom, the industry’s key trade body, noted in a recent statement, the technology landscape is undergoing what it calls “structural change.” The old playbook—built around large-scale manpower and legacy systems—is giving way to leaner, product-aligned models. Speed, agility, and innovation are now the currency clients demand.
Rajesh Nambiar, President of Nasscom, explained that the very idea of growth is being redefined. Emerging technologies like AI, quantum computing, and agentic AI are slowly weakening the traditional link between the number of employees and business expansion. “It’s not just about headcount anymore,” he said. “It’s about capability.”
That said, this evolution is not without its costs. Roles tied to older systems and skillsets are being phased out, and companies are under pressure to do more with fewer people. Still, Nasscom remains optimistic: every wave of disruption brings new opportunities, new roles, and entirely new value chains. The challenge lies in staying ahead of the curve.
And Indian IT firms are certainly trying. As of Q4 FY25, over 1.5 million professionals have been trained in AI and Generative AI capabilities. More than 95,000 employees in large listed IT companies have earned advanced certifications in cutting-edge areas like AI-native cloud and embedded intelligence. It’s a sign that the sector isn’t resisting change—it’s actively preparing for it.
Srikanth Velamakanni, Vice-Chairperson of Nasscom, pointed out a new reality: clients now expect 15% annual productivity gains. That’s putting pressure on firms to rethink their staffing models, especially for employees not currently assigned to billable projects. The upside? Entry-level hires are largely shielded from layoffs. They're seen as flexible and moldable—perfect candidates to reskill for what’s coming next.
He added that billability, once a straightforward metric, is now a moving target. Clients are moving away from hourly billing and looking instead at output and value. That’s forcing service providers to prioritize high-impact skills and speed of delivery over sheer cost-cutting.
Automation in coding and software development is also reshaping pricing models. While it's putting downward pressure on basic service rates, clients are increasingly willing to pay more for premium, niche expertise. In this new world, the cheapest option isn't always the most attractive—results matter more than rates.
Looking ahead, Nasscom anticipates hiring will become more targeted, with demand shifting toward specialized talent with deep domain knowledge. It has also promised to work closely with member companies to ease the transition for affected employees and put support systems in place.
This transition won’t be painless—but industry leaders believe it’s necessary. If India’s tech sector hopes to stay at the forefront of the AI revolution, a leaner, smarter, and more agile workforce may be the key.