TCS CEO K Krithivasan says AI will reshape jobs, not dismantle IT outsourcing model

Tata Consultancy Services chief executive K Krithivasan has sought to allay concerns that artificial intelligence will lead to mass layoffs across the IT services industry, stating that the technology is more likely to change the nature of work rather than undermine the global outsourcing model, according to a report by the Financial Times.

Speaking to the Financial Times, Krithivasan said he does not expect AI to disrupt the $300 billion global outsourcing industry, noting that enterprises will continue to depend on large technology vendors to manage complex systems even as automation gathers pace. He added that while AI adoption is accelerating, the need for scale and expertise in managing enterprise technology remains unchanged.

TCS has been increasing investments in AI-led platforms and services, while simultaneously realigning its workforce to match evolving client requirements. Krithivasan acknowledged that some roles may no longer be relevant as AI becomes more deeply embedded, but stressed that overall demand for technology services remains intact.

As part of its AI strategy, the company has expanded its AI offerings for clients, delivering productivity improvements and creating additional capacity to pursue new deals. Industry analysts said large Indian IT outsourcers are responding to disruption by partnering with leading AI model developers such as OpenAI and Anthropic to build customised tools for enterprise customers.

Krithivasan’s comments come amid ongoing workforce reductions at TCS. The company has announced nearly 12,000 job cuts, representing about 2 per cent of its global workforce, as part of a broader restructuring and efficiency drive. TCS reduced its headcount by 11,151 employees during the October to December quarter, marking a second consecutive quarter of decline. At the end of December, the company reported a total workforce of 582,163 employees, down from 593,314 in the September quarter.

In a recent interview with The Economic Times, Krithivasan said TCS is taking a proactive approach to AI adoption, stating that even if AI efficiencies were to cannibalise some revenue, customers would reinvest the resulting savings into new projects. He added that failing to embrace AI-driven efficiency gains would be more damaging over the long term.

Beyond services, TCS is also expanding its AI ecosystem. The company is in discussions with multiple hyperscalers and deeptech AI firms to establish data centres in India, betting on growing demand for AI infrastructure and computing capacity. Krithivasan had earlier told The Economic Times that there is room for multiple players in the space and that additional capacity is urgently needed.