TCS Puts AI at the Center of its Operating Model
TCS set out its most aggressive AI push yet saying it aims to be the world’s largest AI-led tech services firm while trimming headcount taking a restructuring charge and committing up to $6.5 billion for India-based compute.
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TCS has moved AI to the core of its operating system. From frontline staff to infrastructure, from client contracts to mergers and acquisitions (M&As), the company’s latest results reveal a deliberate, full‑spectrum shift to machine‑led delivery.
During the announcement of its results for the second quarter of the current fiscal, TCS laid out its most aggressive AI strategy yet.
CEO K. Krithivasan told investors, “We are on a journey to become the world’s largest AI‑led technology services company,” and underlined that the company’s transformation is “anchored in bold transformation across talent, infrastructure, ecosystem partnerships and customer value.”
The new direction is not peripheral but seems to be woven into every facet of the business. On the talent front, TCS said it is scaling AI capability internally, with 159,000 of its staff having gained higher proficiency in AI/ML over the year.
Though the company did not disclose attrition and total headcount in its Q2 release, an unusual omission, other filings show its workforce dropped from 613,069 in Q1 FY26 to 593,314 in Q2, implying a reduction of 19,755 employees.
The firm also disclosed a restructuring charge of ₹1,135 crore tied to this realignment.
Meanwhile, TCS is putting real capital behind its AI bet. It has set up a new business unit to build out India-based computing infrastructure and plans to develop up to 1 gigawatt of data center capacity over the next five to seven years.
The idea is to anchor future AI workloads within Indian borders, not in leased capacity, but in facilities TCS will fund, control, and operate.
Krithivasan said each 150MW tranche will cost about $1 billion, with the total investment crossing $6.5 billion. The project will be financed through a mix of equity, debt, and partner capital, he said, adding that “the entire data and compute capacity will be hosted in India” to support sovereign cloud and data‑residency demands.
On the deals and ecosystem front, TCS approved the acquisition of ListEngage, a US-based Salesforce services firm, for $72.8 million (about ₹646 crore).
The Massachusetts company helps enterprises automate marketing and customer engagement using Salesforce’s AI-enabled cloud tools.
The deal adds about 100 professionals to TCS’s US operations and expands its front-office AI offerings, particularly in Salesforce Marketing Cloud and Data Cloud.
“This is more than an acquisition — it’s a growth platform,” ListEngage CEO Altaf Shaikh said.
TCS said the move strengthens its ability to deliver personalized, AI-powered marketing solutions to enterprise clients.
The IT firm reported second-quarter revenue of $7.47 billion, up 0.61% from the prior quarter and down 2.66% from a year earlier, its first year-on-year drop for a fiscal second quarter.
Banks and financial institutions supplied more than three-fifths of incremental revenue and account for about a third of the total.
The print beat the $7.35 billion consensus for the September quarter. Even so, first-half revenue was $288 million lower than a year earlier, a decline of 1.9%.
