TCS Pivots to AI Talent as Digital Skills Drive Future Growth

India's largest IT services company, Tata Consultancy Services (TCS), is reshaping its workforce around digital and artificial intelligence skills, with 80 per cent of new hires now expected to possess these capabilities. The strategic shift comes as AI-related work accounts for a growing share of the company's revenue, positioning it for improved profitability in the coming quarters.

What share of TCS revenue now comes from AI work?

AI-led work contributed 10 per cent of TCS's overall revenue in the September quarter, according to company officials. The company, which remains below its aspirational profit margin levels, expects the expansion of AI revenues to strengthen its financial performance.

How is TCS restructuring its hiring strategy?

Of the 4,500 employees added in the second quarter, between 25 and 30 per cent were hired specifically for AI roles, with approximately 80 per cent of new recruits bringing new-age digital skills, said Arathi Subramanian, TCS's chief operating officer. She confirmed that this hiring pattern will continue, noting that the required talent is available in the market.

Are freshers or mid-career professionals better positioned?

When asked whether freshers hold an advantage over mid-career professionals due to their AI familiarity and lower costs, Subramanian said the advantage lies with those willing to unlearn and learn. Chief Executive and Managing Director K Krithivasan added that mid-level engineers who embrace continuous learning gain a significant edge, as they already understand the technology landscape and domain knowledge that junior engineers may lack.

What investments is TCS making beyond hiring?

Krithivasan stated that TCS will continue investing in niche talent, with mergers, acquisitions, and partnerships serving as additional areas of investment. He noted that as AI deals increase in volume, the company will see corresponding margin benefits.

How are clients engaging with AI services?

Subramanian observed that customers typically begin with a small AI project in one vertical, then expand the scope once the effectiveness of their spending is demonstrated. Regarding the classification of AI deals, Krithivasan said the company takes a conservative approach, though virtually all current work contains some element of AI.

Do recent client acquisitions signal market challenges?

Addressing recent contract wins with Porsche and Best Buy, which involve absorbing client staff into TCS, Krithivasan dismissed suggestions of market difficulties.

These two are opportunities where our customers come to us and we have discussions on how we help them transform themselves and make them AI first,

he said.

Frequently asked questions

What percentage of TCS new hires will have AI skills?

Approximately 80 per cent of TCS's new hires will possess digital and AI skills, with 25 to 30 per cent focused purely on artificial intelligence.

How much of TCS's revenue comes from AI work?

AI-led work accounted for 10 per cent of TCS's total revenue in the September quarter.

Will AI growth improve TCS profit margins?

Company leadership expects that increasing AI deal volumes will contribute to margin expansion over time.