Tata Consultancy Services (TCS) CEO K. Krithivasan has clarified that the company’s recent move to let go of around 12,000 employees is not driven by artificial intelligence (AI), as speculated in some quarters. Instead, he attributed the workforce reduction to changing client priorities and the resulting realignment in demand for specific roles, reported Mint.
Demand dynamics driving workforce changes
Krithivasan stated that the layoffs are primarily a result of evolving client needs, particularly in key markets such as the US and Europe, where economic uncertainties have led businesses to tighten budgets and delay or cancel discretionary tech projects.
“The reduction in workforce is linked to demand,” Krithivasan said. “There is no mass layoff because of AI. This is not a factory where AI replaces people.”
The CEO stressed that TCS is realigning its workforce to match the shifting needs of its global clients and that such fluctuations are a regular part of how the IT services sector functions.
Industry speculation vs. internal reality
Speculation had been rife that generative AI tools like ChatGPT were leading to widespread job losses in the Indian IT sector. However, Krithivasan dismissed these concerns, saying AI adoption at TCS is still in its early stages and is being implemented in a measured, client-specific manner.
“We are experimenting with AI in areas where it adds value to clients, but that doesn’t mean we are replacing jobs en masse,” he clarified.
TCS still hiring in growth areas
Despite the job cuts, TCS continues to recruit in high-demand areas such as cloud computing, cybersecurity, data analytics, and AI itself. The company is investing in reskilling and upskilling programs to ensure employees remain relevant in the rapidly evolving tech landscape.
Krithivasan said that talent management is being handled strategically, with an eye on long-term growth. “We are not just reducing headcount. We are transforming talent to match where the demand is.”
Looking ahead: cautious optimism
The TCS CEO expressed cautious optimism about the future. He acknowledged that 2024–25 might remain volatile due to global macroeconomic conditions but believes that the underlying demand for digital transformation will remain strong.
“The short-term challenges may continue, but the long-term opportunity remains intact. Clients are still committed to technology – just more selective in how they spend,” he said.
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Photo Source: Mint
