TCS CEO K Krithivasan asks employees to embrace AI even if it hurts revenue

Tata Consultancy Services (TCS), India’s leading software exporter, is urging its workforce to leverage artificial intelligence (AI) tools to enhance efficiency and reduce costs, even if this disrupts existing revenue streams. During his address at the Nasscom Technology and Leadership Forum in Mumbai, CEO K Krithivasan emphasized the necessity of embracing change rather than resisting it. Krithivasan stated, "We are encouraging our associates to inform customers about faster, better, and cheaper solutions driven by AI, even at the risk of cannibalizing our own revenue." He stressed that the company perceives AI not as a job threat but as a driver of new opportunities, asserting, "This technology will not diminish our livelihoods; instead, it will create more benefits as we adapt." This shift in TCS's approach mirrors a broader transformation within India's $250 billion IT services industry, where companies are racing to incorporate generative AI into their operational models. This is in response to increasing client demands for cost efficiency and enhanced productivity. Smaller competitor Wipro also shares a similar outlook, predicting that the swift adoption of AI will boost the demand for technology services rather than reduce it. Wipro’s Chief Strategist and Technology Officer, Hari Shetty, expressed optimism that AI could generate more jobs than it displaces. Despite these positive projections, investor confidence has been shaky. In February, Indian IT stocks faced significant downturns, reflecting fears that AI advancements could jeopardize the traditional outsourcing model reliant on extensive hourly labor. The sector saw a staggering loss of approximately $68.6 billion in market value during the month as concerns over automation and global demand uncertainty intensified. The Nifty IT index experienced a sharp decline, dropping over 3,000 points, or 9.13%, within just five sessions. On February 24, shares of TCS, Infosys, and Wipro hit their 52-week lows. However, the Nifty IT Index did manage to recover 472.85 points to close at 30,526.35 in the latest trading session. Market sentiment took a further hit after AI research firm Anthropic announced its "Claude Code" tool, which can update legacy COBOL software still in use across various sectors including banking and insurance. Additionally, a recent report from Citrini Research titled "The 2028 Global Intelligence Crisis" raised alarms that contract cancellations at major firms like TCS, Infosys, and Wipro could escalate as clients increasingly shift towards internal AI solutions for software development and maintenance. Brokerage firm Jefferies has also downgraded six Indian IT stocks, arguing that AI is set to fundamentally alter the industry's revenue landscape, steering focus towards consulting and transformation services while traditional managed services may see a decline.