TCS CEO Discusses Business Outlook and Challenges
In a recent interview, K. Krithivasan, the CEO of Tata Consultancy Services (TCS), addressed the company’s performance and future prospects. TCS, a global leader in IT services, has faced challenges in recent quarters. These challenges stem from clients deferring discretionary spending and seasonal fluctuations. Despite these hurdles, Krithivasan remains optimistic about the company’s growth trajectory for 2025. He also discussed the implications of H-1B visa policies and the impact of new technologies on productivity.
Current Performance and Future Prospects
TCS has experienced a lackluster performance in recent quarters. Krithivasan attributes this to two main factors: the deferral of discretionary spending by clients and the seasonal effects that typically impact the third quarter. He noted that the uncertainty surrounding client budgets has led to a slowdown in growth across multiple geographies. However, he expressed confidence in the company’s ability to rebound.
Looking ahead to the fourth quarter, Krithivasan highlighted positive discussions with clients and a robust order book. He believes that these factors will help TCS regain its growth momentum in the medium term. The CEO emphasized that TCS is well-positioned to navigate the current challenges and is optimistic about surpassing last year’s performance by 2025.
The Role of H-1B Visas in TCS Operations
TCS is one of the largest beneficiaries of H-1B visas, which allow companies to employ foreign workers in specialty occupations. Krithivasan explained that TCS receives between 3,000 and 4,000 H-1B visas annually for a workforce of around 600,000. This number represents a small fraction of their overall hiring strategy. He pointed out that more than 50% of TCS’s workforce in the U.S. is locally hired, indicating a limited dependence on H-1B visas.
With the potential return of former President Trump and changes in immigration policies, Krithivasan acknowledged that “nearshore” operations may gain momentum. TCS has been expanding its nearshore capabilities, particularly in Mexico, to provide services in the same time zone as its North American clients. This strategy not only enhances service delivery but also mitigates risks associated with immigration regulations.
Embracing Technological Advancements for Productivity
Krithivasan discussed the structural shifts occurring within the IT industry, particularly the impact of new technologies on productivity. He noted that companies are increasingly achieving productivity gains without adding to their headcount. The rise of artificial intelligence (AI) is a significant factor in this transformation.
TCS has been proactive in adopting AI and other advanced technologies. The company has trained over 500,000 associates in generative AI, equipping them to leverage these tools for client projects. Krithivasan believes that this technological shift will not only enhance productivity but also create new roles that did not exist before. TCS aims to lead its clients in navigating these changes, ensuring they remain competitive in an evolving market.
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