India’s largest IT services firm is pushing back against fears that AI will erode the outsourcing model, arguing its value lies in client knowledge and integration capabilities that AI tools alone cannot replicate
Tata Consultancy Services is assembling a large team of forward-deployed engineers and actively evaluating acquisitions in AI, data security, and cybersecurity, in its most assertive strategic pivot in years. The moves come as India’s $315 billion IT services industry faces pointed questions about whether AI will shrink demand for the large engineering teams that have been the sector’s backbone.
The Forward-Deployed Engineer Strategy
TCS CEO K Krithivasan told Reuters the company aims to have between 1% and 1.5% of its total workforce operating as forward-deployed engineers, a role that embeds technical staff directly with clients to accelerate AI adoption and customise tools to specific business environments. Based on TCS’s end-June headcount, that translates to between 5,900 and 8,900 employees. Krithivasan did not specify whether TCS would hire externally or retrain existing staff to fill these roles. The model places TCS in direct competition with OpenAI, Anthropic, and Microsoft, all of which have expanded their own forward-deployed engineering programmes.
The Acquisitions Question
The company is also evaluating inorganic growth opportunities after spending years largely avoiding acquisitions in favour of organic expansion. CFO Samir Seksaria said TCS is looking for targets that will enhance its strategic positioning, with AI, data security, and cybersecurity identified as priority areas.
The CEO’s Argument Against Disruption
Krithivasan responded to the idea that artificial intelligence might put the outsourcing model in jeopardy. He maintained that even organizations that operate with diverse AI technologies still have to collaborate with firms to harmonize their software products with the existing infrastructure and govern data streams. In his opinion, TCS sets itself apart due to extensive expertise accumulated through a long working experience with clients rather than due to the monetary advantage in costs.
TCS spends approximately $1 billion annually on internal talent development and AI accessibility, though its annualised AI revenue growth slowed to 13% in the most recent quarter from 28% the quarter before.
