India's TCS urges staff to use AI even if it cuts revenue

India’s Tata Consultancy Services (TCS) has encouraged employees to adopt AI tools to improve efficiency, even if it risks reducing revenue, according to its CEO.

K Krithivasan said that staff should inform clients about faster and cheaper AI-driven solutions, regardless of revenue impact.

The company’s position reflects a broader industry trend, with Wipro also expecting AI to generate more demand and jobs rather than displace them. The Indian IT sector has seen its market value drop by around US$68.6 billion in February, with the Nifty IT index down 21% this month, its worst monthly performance in nearly 23 years.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

TCS is spending big on an AI-first plan

The CEO directive sits inside a formal plan to become the “world’s largest AI-led technology services company” 1.
TCS has funded large internal programs, including training more than 570,000 employees to be labeled “AI-ready” after foundational and other AI upskilling initiatives 2.
That effort has started to pay off, with the AI services business reaching $1.8 billion in annualized revenue by the third quarter of fiscal year 2026 3.
Client work behind that run rate includes AI-led molecule discovery and automated insurance underwriting, which goes past routine cost cutting 4.

India’s IT services model is getting reshaped on purpose

TCS is urging staff to pitch faster, cheaper AI-driven options even when it could trim revenue, which clashes with the old model built on more billable hours from larger teams 3.
That pressure pushes large IT services firms to sell outcomes instead of labor since AI can automate tasks that used to anchor big delivery groups 3.
Concerns in the Nifty IT index drop come from uncertainty around how this shift will play out.
TCS leaders expect Generative AI (GenAI) to lift margins even if productivity gains cannibalise existing work, which changes how the company earns revenue 5.