TLDR: IT companies are increasingly pressuring employees to acquire new skills, particularly in AI and generative AI, to adapt to a rapidly changing job market. This comes as the sector faces subdued growth, rising cost pressures, and a pivot towards AI-first business models, leading to significant workforce reductions and a focus on ‘learnability’ for job security.
The global IT services sector, traditionally a robust job creator, is undergoing a significant transformation driven by the rapid adoption of artificial intelligence (AI) and generative AI (Gen AI). This shift is prompting IT companies to issue stern warnings to their employees: reskill or face potential job losses. The industry is experiencing a period of muted growth, exacerbated by geopolitical tensions, inflation, and macroeconomic headwinds, which are collectively intensifying pressure on profit margins.
Companies like Tata Consultancy Services (TCS) and Cognizant are actively pivoting towards AI-first business models, which favor tech-savvy and younger talent. This strategic realignment necessitates that the existing workforce upgrades its skills to remain relevant. The emphasis is now heavily on ‘learnability,’ as companies prioritize employees who can quickly adapt to new technologies and evolving job requirements. Kishor Patil, CEO of KPIT Technologies, underscored this point, stating, ‘People are taking effort to train and adapt to current skills. If that is not there, they are not useful to us.’ He further added that the ‘lenses have changed in terms of the quality of hiring from campus and laterals. What is important is learnability.’
This wake-up call follows significant workforce adjustments across the industry. TCS, India’s largest IT employer, has reportedly let go of over 12,000 mid-to-senior managers, citing poor redeployment opportunities. Intel is also undertaking substantial layoffs, with plans to reduce its headcount from approximately 109,000 at the end of 2024 to 75,000 by the end of 2025, representing about 31% of its workforce. Microsoft has also seen mass layoffs, with CEO Satya Nadella describing the reduction of over 9,000 individuals as ‘necessary’ for the company’s AI transformation. Overall, the tech sector has seen more than 138,000 employees laid off between January 1 and July 27, 2025, with projections indicating this number could exceed 242,000 by year-end if the trend continues. American companies account for a significant portion of these job cuts, representing 69.4% of the reported global layoffs.
The current wave of layoffs is not solely attributed to AI but also to broader cost-cutting strategies and economic uncertainty. However, the accelerating shift towards automation and AI is a primary driver, leading to the disappearance of entire roles once considered essential. While some executives previously emphasized AI’s role in complementing human workers, there is a growing consensus among corporate leadership that AI will eliminate certain positions and fundamentally change others. Salesforce CEO Marc Benioff noted that AI is already performing 30% to 50% of the company’s work. An AI startup, Anthropic, has even warned that AI could eliminate over half of all entry-level white-collar jobs within the next one to five years.
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While historical patterns suggest technological advancements eventually create new jobs, the rapid pace of AI development may lead to significant short-term disruption. This could outpace the creation of new job categories and training systems, potentially resulting in periods of higher unemployment. Consequently, workers across various sectors, including customer service, administrative roles, and knowledge-based professions like law, finance, and healthcare, face uncertainty regarding their professional futures. The imperative for reskilling and adaptability has never been more critical for job security in the evolving IT landscape.
