Why TCS CEO is Telling Staff to Cut Their Own Revenue with AI

Tata Consultancy Services (TCS) CEO K. Krithivasan has directed the company’s 600,000-plus employees to prioritize AI-driven efficiencies, even if it leads to “cannibalizing” the company’s own revenue streams.

Speaking at the Nasscom Technology Leadership Forum on February 25, 2026, Krithivasan emphasized that the long-term survival of the firm depends on being an “AI-first” partner rather than protecting billable hours.

The “Faster, Better, Cheaper” Mandate

The core of TCS’s new strategy is a directive to associates: if a task can be performed more efficiently using Artificial Intelligence, employees must proactively offer that solution to clients.

This represents a fundamental shift for an industry that has historically relied on the “time and material” model, where more hours worked equated to higher billing.

“If you find that you can do something faster, better, cheaper with AI, you should probably go and tell your customers, even if it cannibalizes your revenue,” Krithivasan stated.

He framed this not as a financial loss, but as a “civilizational shift” that requires the company to evolve or risk obsolescence.

TCS Addressing the Generational AI Divide

A key insight from the CEO’s address was the internal disparity in AI adoption.

Krithivasan noted that while junior associates are “dirtying their hands” and building practical solutions, senior management often remains at a theoretical level.

To bridge this, TCS is now “insisting” that senior leaders move beyond simply reading about AI to actually building tools themselves.

This push for hands-on fluency is intended to ensure that leadership can guide clients through the complex “data orchestration” required for enterprise-grade AI, which remains a significant hurdle for many global organizations.

Market Volatility and Structural Risks

The aggressive stance comes at a time of extreme pressure for the Indian IT sector.

In February 2026 alone, the Nifty IT index plummeted nearly 21%, wiping out billions in market value as investors grew anxious over AI’s potential to automate legacy managed services.

By leaning into disruption, TCS aims to pivot toward higher-value consulting and AI infrastructure orchestration.

The company recently reported that its AI services have already reached an annualized revenue of $1.8 billion, growing at over 17% per quarter.

This suggest that while “old” revenue may shrink, a new, more specialized revenue stream is rapidly emerging to take its place.

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