Nasscom Warns of Workforce Realignment as AI Disrupts IT Sector

The National Association of Software and Service Companies (Nasscom) has issued a formal statement titled “Workforce Realignment and Industry Transformation”, warning of global workforce rationalization as artificial intelligence (AI) and automation redefine operational models across the technology sector.

The statement follows Tata Consultancy Services’ (TCS) recent announcement to reduce its global workforce by 2 percent, affecting approximately 12,000 employees. Nasscom described the industry as being at a critical “inflection point,” with AI moving to the core of business operations.

“Over the upcoming several months, we anticipate some major transitions as organizations are going towards product-aligned delivery models, which are driven by clients’ demand for agility, speed, and innovation,” the industry body noted. “This shift is likely to replace the traditional service delivery frameworks and may lead to workforce rationalization shortly as traditional skillsets are re-evaluated.”

Despite the near-term disruptions, Nasscom underscored its long-term confidence in the transformative power of AI. “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.”

Nasscom highlighted the scale of global reskilling underway. As of Q4FY25, more than 1.5 million professionals worldwide have been trained in AI and generative AI (GenAI) skills. Among them, over 95,000 employees in major listed firms have completed advanced AI training in areas including AI-native cloud, embedded AI, and applied intelligence certifications.

The association also noted a shift in global hiring trends, with organizations now prioritizing deeper, niche expertise aligned with strategic goals. “There is no one-size-fits-all solution,” it stated, indicating that companies will adopt diverse workforce strategies depending on their digital maturity and client demands.

To address the widening skill gap, Nasscom urged industry, academia, and governments across regions to collaborate in embedding talent development as a core business and national priority. It stressed the importance of aligning education systems and workforce development initiatives to keep pace with rapid technological advancement.

The statement reflects a broader industry transformation underway worldwide, where AI-led disruption is reshaping job roles, delivery models, and skill demands—requiring swift and coordinated responses from global stakeholders.