Chandrasekaran says TCS has seen the worst; AI to reshape workforce
BENGALURU: Tata Consultancy Services Ltd (TCS) has seen the worst of its recent slowdown and expects artificial intelligence to drive its next phase of growth, chairman N Chandrasekaran said on Tuesday, outlining a future in which the country’s largest technology services company could eventually deploy as many AI agents as employees.
The comments, made at TCS’s 31st annual general meeting (AGM), came as shareholders put pressure on management over the company’s share price performance and the impact of artificial intelligence on jobs, growth and the broader technology-services sector.
growth path
Addressing concerns about the company’s recent performance, Chandrasekaran argued that technology disruptions have historically weighed on growth, investor confidence and valuations before embarking on a new phase of expansion.
“Shareholders who have stayed with the company for the last 25, 30 years or at least 20 years since we went public, you will know that we are facing technology disruptions and with every technology disruption there is a transition period. As customers pause the adoption of technology, you will see a slowdown in growth, the market will lose confidence and the share price will fall,” said Chandrasekaran in response to shareholders’ questions on the share decline.
At least one seventh of the 42 shareholders present at the General Assembly meeting asked questions to the management about the decline in share prices, while four fifths asked questions about artificial intelligence and its impact on the company.
TCS shares fell 0.1 percent on Tuesday ₹2,149.55, the lowest in six years. The stock has fallen 33% since the beginning of the year, making it the worst performer among the nation’s five largest information technology services companies. Shares of Infosys Ltd, HCL Technologies Ltd, Wipro Ltd and Tech Mahindra Ltd fell between 7% and 31% during the same period.
“Share prices may fall for two reasons. Either because the company’s earnings from profits are falling, or because the market’s faith in future growth is questionable. Therefore, P/E (price-earnings) multiples are falling,” said Chandrasekaran, “we have seen the worst in the last few years and I believe that AI growth will be significant.”
The Mumbai-based company reported revenue of $30.02 billion last year, down 0.5% from the previous year. Most of the decline was driven by the India business, which accounted for 8% of revenue. This was the company’s first annual revenue decline since its IPO in 2004.
Chandrasekaran said TCS is focused on returning to double-digit revenue growth but declined to commit to a timeline. The company expects AI revenue to help drive annual growth.
TCS finished the January-March 2026 quarter with annual revenue of over $2.3 billion.
artificial intelligence exchange
A key part of this growth strategy is TCS’s effort to embed AI across its business. Management has said that within the next two years, all of the company’s revenue will have an AI component.
The company also highlighted how technology could reshape the workforce, as automation tools take over some of the work traditionally performed by technology services firms.
“The company will have an equal number of AI employees, we call them AI agents, because there are employees. (If) the company has half a million employees, the day is not far off when the company will have half a million AI agents,” said Chandrasekaran.
TCS finished the last financial year (FY26) with 584,519 employees, a decrease of 23,460 from the previous year. Much of this was due to the company’s biggest layoff campaign last year.
The company said hiring will remain quiet going forward.
“Will AI definitely lead to a decline in hiring? Absolutely. The company will not hire the same kind of people it used to hire,” said Chandrasekaran, “because in the current setup, certain parts of the job will go to agencies.”
But he added that even if overall hiring declines, artificial intelligence will create new opportunities and talent needs.
“This will be the nature of the transition that we will have to go through, not just as a company, but as an industry and as a country,” he said. The company has not planned any further layoffs for now.
new challenges
Saying that the increasing use of artificial intelligence agents also brings risks, Chandrasekaran noted that they may go off course and worsen over time.
Establishing them within an organization, training them in a specific context, tracking performance, managing compliance, and managing costs at scale “will be a huge challenge and a huge opportunity for established IT services firms.”
Despite these challenges, Chandrasekaran described artificial intelligence as the company’s most significant opportunity.
A colleague expressed a similar opinion.
“After more than 3 years since the launch of generative AI, we can say with certainty that Infosys is more relevant than ever and has a bright future ahead of us. The shift from predictable to probabilistic machines is as important as the pace of adoption and is reshaping what business requires now,” Nandan Nilekani, chairman of Infosys Ltd, said in a speech to shareholders on May 22 as part of the company’s annual report.
While shareholders have been pressuring management on AI and the company’s recent performance, none have raised questions about Chandrasekaran’s possible third term as chairman of Tata Sons. One shareholder congratulated him on completing 10 years in office.
