'People are taking effort to train and adapt to current skills.'
'If that is not there, they are not useful to us.'
'They have to adapt to new technology, and what is important is learnability.'
India's top information technology services firms are sending a clear message to their employees: Upskill and reskill for an age increasingly defined by AI and generative AI (GenAI).
Those unwilling or unable to adapt risk losing their jobs.
The $282 billion sector, employing around 6 million people, has long been one of the country's largest organised job creators.
But the tone has shifted: Layoffs -- described as 'involuntary attrition' in industry parlance -- have usually been handled discreetly, given the sensitivity. That discretion appears to be fading.
Industry body Nasscom has supported the move.
'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 in a statement.
The warning comes after two years of subdued growth, hit by geopolitical tensions, high inflation, and broader macroeconomic uncertainty.
With the outlook for the current financial year (FY26) appearing similarly muted and tariff threats looming, firms are now acting to protect their bottom lines.
"People are taking effort to train and adapt to current skills. If that is not there, they are not useful to us," Kishor Patil, CEO, KPIT Technologies, said at a news conference, while announcing the company's first-quarter results.
"Our lenses have changed in terms of the quality of hiring from campus and laterals. They have to adapt to new technology, and what is important is learnability."
It all started in earnest with TCS deciding to lay off more than 12,000 people from its mid- to senior-management roles, saying that despite reskilling initiatives, redeployment of 2 per cent of the workforce was not possible.
IT services firms have seen two years of subdued growth, dragged down by global geopolitical instability, inflationary pressures, and weak client spending.
With 2025-2026 offering little optimism, and tariff-related uncertainty still looming, companies are making tough decisions to protect their balance sheets.
"With no new projects coming in and the possibility of getting many in the near future also less, companies cannot sustain lower margins," said Neeti Sharma, CEO, TeamLease.
Firms are now focusing on hiring individuals with specialised skills in AI, data science and cybersecurity, moving away from traditional project management and delivery roles.
Younger employees, perceived as more adaptable, are increasingly preferred to more experienced but less agile staff.
Nasscom noted that hiring patterns would continue to evolve, with growing 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,' it said.
"AI knowledge for most employees in these (IT) organisations is very peripheral," said Kamal Karanth, founder of specialist staffing firm Xpheno.
"Companies are looking at tech skills, domain expertise, and client-specific skills to hire."
As AI becomes more embedded in software development, the role of engineers and managers is being transformed.
Cognizant reported that 30 per cent of its code is now machine-generated, up from 20 per cent just six months earlier.
Engineers are being repositioned to supervise AI output, rather than write code themselves.
Managers, meanwhile, are tasked with leading a hybrid workforce of human and digital agents.
"One needs to manage digital and human labour, as there will be agents in projects. If you are a programmer, you can be outpaced if you do not use AI," said Cognizant CEO Ravi Kumar.
"We have a mechanism for all to innovate using tooling, such as code assist platforms to support you to be more productive."
Mid-tier firm Happiest Minds said earlier this week that it too was reassessing its workforce, with a sharper focus on client-demand alignment.
The company has begun parting ways with employees whose skills no longer match evolving requirements or who resist upskilling.
Staffing firm heads say the dual pressures of weak growth and rapid AI adoption are exposing anomalies in the IT sector's employee base.
"The industry is a pyramid model and you can manage a big workforce if you are growing at 15 to 20 per cent," said Pareekh Jain, CEO, Pareekh Consulting and EIIRTrend.
"If the macroeconomic situation was better, they would have undertaken these attritions gradually. But with TCS calling out the problem, all have called out together. Also with AI, the whole industry is shifting to diamond from a pyramid."
The industry has already made considerable progress in retraining its workforce.
As of Q4FY25, over 1.5 million professionals had undergone AI and GenAI training at various levels.
Of those, more than 95,000 employees in listed firms have completed advanced certifications in AI-native Cloud, embedded AI and applied intelligence.
Feature Presentation: Aslam Hunani/Rediff
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