TCS’ Krithivasan urges senior employees to build AI solutions
Tata Consultancy Services Ltd CEO K. Krithivasan issued a directive to senior executives: build or become obsolete. He cautioned that while junior employees at India’s largest IT services exporter are mastering productive tools in a bid to move towards an AI-first future, senior management is still reading and hearing rather than creating.
“We found that our senior level people are probably more proficient and more comfortable with new technology. As people move up, we tend to read too much, hear too much about them, but we don’t come up with enough (solutions),” Krithivasan said during a fireside chat at the Nasscom Technology and Leadership Forum in Mumbai.
“So we all need to define and basically insist that all of the senior management needs to build on that knowledge so that they understand how the business is going. It’s not just about asking questions; it’s about how you build, how long you can build it and when you build it, what we do manually to make it work,” added Krithivasan.
His comments come after the company carried out arguably its biggest job cuts campaign last year, laying off nearly 12,200 executives from middle to senior management to future-proof it.
As of March 2024, almost half of TCS’s workforce, or approximately 451,160 employees, were under 30 years of age. This is down from FY22, when employees in this group made up around 60% of the workforce. The company did not disclose the age distribution of its employees in its FY25 annual report.
It is imperative that employees across the board learn basic AI tools. This is true in most companies.
He reiterated that employees are encouraged to use AI, even if it means undermining existing revenue. Krithivasan’s comments come amid new concerns about the importance of the country’s IT industry.
Doing cannibalism to survive
“Look, we don’t really need to incentivize because everyone wants to learn this technology. We should tell them: One, I’m giving you ample opportunity to learn, two, I encourage you to ensure that every solution you provide to your customer is AI first. Like I said, even if that means we undermine revenue,” Krithivasan added.
Krithivasan’s comments came less than two weeks after Tata Sons chairman Natarajan Chandrasekaran also made a similar speech at TCS’s annual two-day summit in Abu Dhabi.
Chandrasekaran, who is also the Chairman of TCS, shared that he spends at least an hour every day at Blitz reading and understanding how AI is changing the world and asked senior leaders among the 600 executives to go beyond delegating AI work and focus on learning relevant new technologies, according to an executive familiar with the development.
Describing AI as a ‘civilisational shift’, Chandrasekaran faces the challenge of getting TCS to embrace these new technologies in the way it delivers services, which in turn cannibalize its own business and change the way it has done business so far.
TCS reported annual AI revenue of $1.8 billion as of December. On the other hand, Infosys and HCLTech reported AI-related revenue and advanced AI revenue at $280 million and $146 million, respectively, during October-December 2025.
Concerns increased after Anthropic announced new additions to its Claude AI tool on January 30. These new additions further automate legal, marketing and software development-related tasks.
New technology has led to disagreements over the importance of the country’s $297 billion IT industry.
Vinod Khosla, founder of Khosla Ventures, said that the IT services industry will be defunct by 2030. IT managers, on the other hand, had different opinions.
distribution gap
On February 17, Infosys chairman Nandan Nilekani said that AI technology development is outpacing the technology capabilities of large companies. “The bottom line is that the technology is way ahead of deployment. Because of this race and the billions of dollars being spent on AGI (artificial general intelligence) and all of that, the technology is advancing faster than businesses’ ability to deploy it,” he said at the company’s first investor day.
“Fundamentally, we are faced with a situation where there is a distribution gap between the power of the technology and the capacity of businesses to use it. If you think a better product is coming, nothing will happen because it’s about how fast companies can implement it,” Nilekani said, adding that Infosys could bridge this distribution gap.
Even one brokerage firm said concerns about depreciation were exaggerated.
A Feb. 17 report by Bank of Baroda Capital Markets said AI reducing labor demand “could put revenue growth and profit forecasts at risk,” but it was “not an existential risk.”
“Businesses’ AI adoption is low or slow because many are not ready, CIOs (chief information officers) may want AI models to stabilize, ROI (return on investment) thresholds need to be met, there is room to further reduce errors from AI models, integrators need to make AI work with businesses’ various legacy technologies, and deep domain capabilities are required,” the report said.
Key Takeaways
- TCS identifies a competency lag where senior leaders understand AI in theory but junior staff lack hands-on development skills.
- The company is ready to cannibalize its own traditional revenue to ensure customers receive AI-first solutions by prioritizing long-term relevance over short-term billing.
- According to Nandan Nilekani, the real challenge is not the AI technology itself, but the slow pace at which businesses are actually implementing it.
- TCS is facing its first full-year revenue decline, reflected in an 18% decline in shares YTD, driven by a reduction in large contracts and the impact of customer churn.
- While some investors see AI as a risk to the $297 billion industry, TCS leadership sees it as a ‘wave that needs to be ridden’ rather than an existential crisis.
Do challenges lead to future readiness?
For now, AI is not the only challenge facing TCS.
TCS has faced turbulence more than once in the last 12 months. The nation’s largest IT services company, which reported $30.18 billion in revenue last year, is bracing for its first revenue decline of the entire year, according to at least three brokerages.
This is due to the decline of major contracts, the shift of clients to peers and the company’s current need to meet last year’s growth. Investors noted that the company’s shares have fallen more than 18% since the beginning of the year.
Krithivasan’s comments follow Chandrasekaran’s comments last week. “The value proposition is different for every industry and the value proposition for every company will be different depending on where they are located. Where will they look for efficiencies? Where will they look for a new business model? Where will they create a unique, differentiated and differentiating factor? This is where IT services companies will work with enterprise customers,” said Chandrasekaran.
IT services companies will not only survive but also ride the AI wave, he said.
“I can see both sides. There is a side of me that TCS has to ride this AI wave. Another will say it has to survive this AI wave. I feel it will ride the AI wave,” said Chandrasekaran.
