Tata Consultancy Services Ltd CEO K. Krithivasan has issued a directive to the top brass: build or become obsolete. In a push towards an AI-first future, he warned that while junior associates in India’s largest IT services exporter are mastering generative tools, senior management is still reading and hearing rather than creating.
“What we find is that our associates at the junior level are probably more proficient, more comfortable with the new technology. As people go to the senior level, we tend to read a lot, hear about them a lot, but we don’t build enough (solutions),” said Krithivasan, during a fireside chat in the Nasscom Technology and Leadership Forum in Mumbai.
“So, we need to define and basically insist that all of us, all the senior management, must build something on that knowledge so they understand how it is going. It’s just not about asking questions; it’s how you build, how soon you can build and when you build it, what we are doing manually to ensure that it works,” added Krithivasan.
His comments come after the company conducted arguably its largest layoff drive, letting go of about 12,200 executives at the middle and senior levels to make it future-ready last year.
As of March 2024, almost half of TCS’s workforce, or about 451,160 employees, were under the age of 30. This is lower than FY22, when employees in this cohort accounted for about 60% of the workforce. The company did not disclose the age breakup of its employees in its FY25 annual report.
Employees across the board are mandated to learn basic AI tools. This is across most companies.
He reiterated that employees were also urged to use AI even if it meant cannibalizing existing revenue. Krithivasan’s comments come as fresh concerns mount over the relevance of the country’s IT industry.
Cannibalizing for survival
“See, we don’t have to really incentivize because everybody wants to learn this tech. We need to tell them that one, I am giving you enough opportunity to learn, two, I am encouraging you to ensure that every solution you provide to your customer is AI-first. As I said, even if it means that we are cannibalizing the revenue,” added Krithivasan.
Krithivasan’s comments come less than a fortnight after Tata Sons chairman Natarajan Chandrasekaran also made a similar pitch at TCS’s annual two-day summit at Abu Dhabi.
At Blitz, Chandrasekaran, who is also TCS’s Chair, shared that he spends at least an hour every day reading and understanding how AI is changing the world, and asked senior leaders among the 600 executives to move beyond delegating AI work and focus on learning new related technologies, according to an executive privy to the development.
Calling AI a ‘civilizational change’, Chandrasekaran faces the challenge of making TCS embrace these new technologies in how it offers services, and, in turn, even cannibalizing its own business and changing the way it has done business until now.
TCS reported annualized AI revenue of $1.8 billion as of December. On the other hand, Infosys and HCLTech reported AI-related revenue and advanced AI revenue of $280 million and $146 million, respectively, during October-December 2025.
Concerns have further aggravated after Anthropic announced new plug-ins to its Claude AI tool on 30 January. These new additions further automate legal, marketing, and software development-related tasks.
The new technology has divided opinions on the relevance of the country’s $297 billion IT industry.
Vinod Khosla, founder of Khosla Ventures, said that the IT services industry will cease to exist by 2030. On the other hand, IT heads held varying opinions.
Deployment gap
On 17 February, Infosys chairman Nandan Nilekani said AI technology development has outpaced the tech capabilities of large companies. “The main thing is that the technology is far ahead of its deployment. Because of this race and spending billions on some AGI (artificial general intelligence) and all that, the technology is moving faster than the ability of enterprises to deploy it,” he said at the company’s first investor day.
“Fundamentally, we have a situation where there’s a deployment gap between the power of the technology and the capacity of businesses to use this. If you think that some better product has come, nothing is going to happen because the problem is in how fast companies can implement,” said Nilekani, adding that Infosys can address this deployment gap.
Even a brokerage said that concerns surrounding a loss of value were overblown.
A 17 February report by Bank of Baroda Capital Markets said that while AI reducing workforce demand “could put revenue growth and profit estimates at risk”, this was “not an existential risk”.
“AI embrace by enterprises is low or slow as many are not ready, CIOs (chief information officers) may want AI models to stabilize, RoI (returns on investment) thresholds need to be met, there is room for further reduction in errors by AI models, integrators are required to make AI work with varied legacy tech of enterprises, and deep domain skills are required,” the report said.
Key Takeaways
- TCS identifies a proficiency lag where senior leaders understand AI theoretically but lack the hands-on building skills of junior staff.
- The company is willing to cannibalize its own traditional revenue to ensure customers receive AI-first solutions, prioritizing long-term relevance over short-term billing.
- The primary challenge isn’t the AI tech itself, but the slow pace at which enterprises actually implement it, according to Nandan Nilekani.
- TCS is facing its first full-year revenue decline, driven by fewer large contracts and client attrition, reflected in an 18% YTD stock decline.
- While some investors see AI as a risk to the $297 billion industry, TCS leadership views it as a ‘wave to be ridden’ rather than an existential crisis.
Challenges ensure future-readiness?
For now, AI is not the only challenge that TCS faces.
TCS has encountered turbulence on more than one occasion in the last 12 months. The country’s largest IT services company, which reported $30.18 billion in revenue last year, is poised for its first full-year revenue decline, according to at least three brokerages.
This is due to fewer big-ticket contracts, client slippage to peers, and the company’s current need to match last year’s growth. Investors have taken note as the company’s shares have fallen more than 18% since the start of the year.
Krithivasan’s comments follow Chandrasekaran’s opinion last week. “The value proposition is different for each industry, and the value proposition for each company will be different, depending upon where they are. Where will they look for productivity? Where will they look for a new business model? Where will they create a unique, differentiated, and differentiating factor? That is where IT services companies will work with the enterprise customers,” said Chandrasekaran.
He said IT services companies would ride the AI wave and not just survive.
“I get to see both sides. I’ve got one side (where) TCS has to ride this AI wave. Somebody else will say they have to survive this AI wave. I feel that (it’s) going to ride the AI wave,” said Chandrasekaran.