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Nasscom predicts workforce rationalisation as IT industry transitions
In its statement, Nasscom noted that 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.'
In the long term, however, technology will remain a powerful catalyst for growth. 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, said Nasscom.
The industry has already taken significant steps in preparing its talent base for this shift. As of Q4FY25, over 1.5 million professionals have been trained in AI and GenAI skills across levels. In particular, advanced AI skilling initiatives have reached more than 95,000 employees in leading listed firms, covering AI-native cloud, embedded AI, and applied intelligence certifications, said the industry body.
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.
Nasscom, however, highlighted in its reaction that what is critical now is a shared commitment. 'Industry, academia, and government must collaborate more deeply to bridge the skill divide and embed talent development as a national and business imperative central to sustaining India's technology leadership in the AI era,' it said.
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Business Standard
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Indian Express
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When interest rates are high, spending in the US gets impacted, including on IT. This has a bearing on the contracts awarded to Indian IT firms,' said an analyst. Analysts say that due to weak demand, IT companies are likely to slow down their hiring in the near future. 'With muted demand and tighter budgets, companies are focusing on optimising existing talent rather than expanding headcount. Hiring remains subdued, while utilisation rates are rising and attrition has stabilised. The shift is towards value-based deployment and reskilling for AI-driven roles, setting the stage for long-term workforce transformation,' Kailasan of Geojit Investments said. IT analysts said that domestic IT companies are likely to see soft earnings for the rest of 2025 amid volatile and uncertain geopolitical conditions. 'The main challenge remains the slowdown in decision-making among major US clients,' said Ashish Gupta, chief investment officer at Axis Mutual Fund. 'There's a lot of uncertainty around the outlook—questions about retail spending, how consumers will respond to potentially higher interest rates, and whether the US economy can maintain its momentum. The broader economic picture remains unclear.' A report by Nuvama Research said that the demand environment is expected to remain challenging for the next one to two quarters for the IT sector due to the macro — tariff-related — uncertainty. 'In the near term, we expect lack of clarity on macro to continue until most of the trade deals are announced. In general, a large part of the impact of delays was felt in Q1 FY26. The second quarter of FY26 can have some residual impact of the delays. If there are no further delays, Q2 FY26 will be at least better than the first quarter,' said Sumit Pokharna, vice president (Fundamental Research), Kotak Securities. IT sector experts anticipate recovery in 2026 as clarity on the US tariffs emerges and potential rate cuts by the US Federal Reserve help revive demand.
