After 20,000 layoffs, TCS CEO pressures employees to use more AI even if profits are affected
As job concerns and falling IT stocks create uneasiness, TCS is asking employees to fully embrace AI and be honest with customers about cost savings, even if it hurts revenues.
At a time when concerns about AI are already rising in India’s IT sector, the country’s largest software services company is asking its employees to do something that seems almost counterintuitive – use AI as aggressively as possible, even if it means charging customers less and hurting the company’s own revenues in the short term.
The message comes straight from Tata Consultancy Services CEO K Krittivasan, who spoke candidly about the company’s AI strategy at the NASSCOM Technology and Leadership Forum in Mumbai on Wednesday. His comments come against a backdrop of job cuts, falling IT stocks and growing fears that automation could decimate businesses built on large teams and long billing cycles.
❮❯
According to Reuters, Krithivasan told the audience that TCS is actively asking its employees to use AI tools to get work done faster and at lower costs. More surprisingly, he said that employees should talk openly with customers about these benefits, even if it means lower billing.
“We’re saying to partners that if you think you can do something faster, better, cheaper with AI, you should probably go and tell your customers, even if it means losing revenue,” he said.
The timing of this push has attracted the attention of both investors and employees. Over the past month, concerns over how AI could change the Indian IT model have weighed heavily on stock prices. According to market data, about $68.6 billion of value has been wiped off Indian IT companies in February alone as investors try to understand what happens next.
Selling has been brisk. The Nifty IT index is down 21 per cent so far this month, heading for its worst monthly performance in nearly 23 years. Much of the pressure comes from the fear that AI-driven efficiency will mean fewer people are needed to do the same amount of work.
Those apprehensions have been strengthened by the developments inside TCS. In October 2025, reports revealed that the company’s employee headcount declined by nearly 20,000 during the June to September quarter of the 2025–26 financial year, at a time when it was restructuring teams and increasing focus on AI-led delivery.
TCS’ workforce declined by 19,755 employees in Q2FY26, bringing the total headcount to 593,314 from 613,069 at the end of the previous quarter, company data showed. For many in the industry, the numbers came as a reminder that change is already underway.
However, TCS has rejected the idea that the decline points to massive job losses entirely due to automation. Its investor presentation shows that voluntary attrition has improved over the same period. The attrition rate declined by 50 basis points to 13.3 percent in Q2FY26, compared to 13.8% in the previous quarter.
Clarifying the situation, TCS Chief Human Resources Officer Sudeep Kunnumal said the cuts are not the result of any single factor. “The (reduction) of 20,000 employees is a factor in voluntary and involuntary attrition,” he said.
Krithivasan sounded a confident tone while speaking about the long-term impact of AI on jobs. He argued that technology should not be seen as a threat to livelihoods, but as a tool that can create new opportunities if used well. He said, “We are not afraid that this technology will take away our livelihood. We believe that it is going to open up more, so the more you take advantage, the more you will not resist the change.”