TCS CEO Urges Bold AI Adoption Despite Revenue Risks Amid Workforce Decline
TCS asks employees to fully embrace AI and disclose cost savings to clients, even if it temporarily reduces company revenue.
As anxiety deepens across India’s IT sector over artificial intelligence and job security, Tata Consultancy Services (TCS) has taken a surprisingly transparent stance. The country’s largest IT services company is encouraging employees to adopt AI aggressively — even if doing so reduces client billing and dents short-term revenue.
The message came directly from TCS CEO K Krithivasan during his address at the Nasscom Technology and Leadership Forum in Mumbai. Speaking candidly, Krithivasan outlined a strategy that places long-term transformation above immediate financial comfort.
According to Reuters, Krithivasan said the company is actively urging employees to use AI tools wherever possible to improve speed, efficiency and cost-effectiveness. More notably, he advised teams to be transparent with clients about the productivity gains enabled by AI — even when it leads to reduced billing.
“We are telling associates that if you find that you can do something faster, better, cheaper with AI, you should probably go and tell your customers, even if it cannibalises revenue,” he said.
The timing of these remarks is significant. Indian IT stocks have been under sustained pressure amid concerns that AI-led automation could disrupt traditional outsourcing models dependent on large teams and long billing cycles. Investors appear wary of how automation may reshape revenue structures.
Market data shows that Indian IT firms collectively lost around $68.6 billion in market value in February alone. The Nifty IT index has fallen 21 per cent this month, marking its steepest monthly decline in nearly 23 years. Analysts attribute much of the sell-off to uncertainty around how generative AI and automation tools will alter workforce requirements and profitability metrics.
Within TCS itself, workforce numbers have drawn attention. During the June–September quarter of FY26, the company’s headcount dropped by 19,755 employees. Total employee strength stood at 593,314 at the end of the second quarter, down from 613,069 in the previous quarter.
The scale of the reduction has sparked speculation about automation-driven layoffs. However, TCS leadership has clarified that the decline was not solely due to AI replacing jobs.
TCS Chief Human Resources Officer Sudeep Kunnumal explained that multiple factors contributed to the drop. “The 20,000 headcount (reduction) is a factor of voluntary and involuntary attrition,” he said. Company data also indicates that attrition improved slightly, easing to 13.3 per cent in Q2 FY26 from 13.8 per cent in the previous quarter.
Krithivasan maintained an optimistic outlook about AI’s broader impact on employment. Rather than viewing automation as a threat, he framed it as an opportunity for reinvention and growth within the industry.
“We are not afraid this technology will take away our livelihood. We believe it is going to open up more, so you enjoy the benefits the more you do, and not by resisting the change,” he said.
At a time when fear of job displacement is running high, TCS appears to be betting that transparency, adaptation and early adoption will ultimately strengthen its position in a rapidly evolving technological landscape.
