TCS Plans to Hire 15,000 Employees in the US Over the Next Five Years Amid H-1B Challenges
Bengaluru-based Tata Consultancy Services (TCS) has reported disappointing results for the December quarter, falling short of analysts’ expectations in both revenue growth and earnings before interest and taxes (Ebit) margins. Despite the ongoing global economic uncertainty, the demand for technology-led transformation remains strong. In a recent interview, TCS CEO K Krithivasan and Chief Human Resources Officer Sudeep Kunnumal shared insights on the current demand landscape, hiring strategies, and the future of AI-driven revenue growth.
Demand Resilience Amid Economic Challenges
TCS’s performance in the December quarter reflects a complex landscape for the technology sector. While the company did not meet revenue growth expectations, Krithivasan highlighted a positive trend in total contract value, indicating that clients are increasingly willing to invest in new projects. He noted that many AI initiatives, which were previously in the experimental phase, are now moving into production. This shift suggests that clients are focusing on projects that promise clear returns on investment and shorter payback periods. Krithivasan expressed confidence that this trend will continue, as companies seek to optimize costs and embrace transformation in their operations.
Growth in AI Services
TCS has reported a significant increase in its AI services revenue, which rose to $1.8 billion on an annualized basis, up from $1.5 billion in the previous quarter. Krithivasan emphasized the importance of short-cycle and rapid-build AI projects, which deliver measurable outcomes in a shorter timeframe. He believes that while AI’s contribution to revenue is currently incremental, its impact will grow substantially in the future. This focus on AI aligns with the broader industry trend of leveraging technology to drive efficiency and innovation.
Hiring Strategies and Talent Acquisition
Despite a reduction of approximately 31,000 employees over the past two quarters, TCS remains committed to hiring high-quality talent. Sudeep Kunnumal stated that the company continues to recruit actively, focusing on upskilling its existing workforce while also hiring from campuses and experienced professionals globally. Although there are discussions about recalibrating campus hiring targets in light of AI-driven productivity gains, Kunnumal refrained from committing to specific numbers. He noted that TCS has adopted a tiered salary structure, which has led to an increase in hires from higher salary tiers.
Local Hiring and Future Plans
In response to the current labor market dynamics, TCS has shifted its hiring strategy to prioritize local talent, particularly in the United States. Kunnumal mentioned that the company plans to hire around 15,000 people locally over the next three to five years, reducing its reliance on H-1B visas. This strategy is part of TCS’s broader approach to building a strong local employer brand. Additionally, Krithivasan addressed concerns regarding the risks associated with debt-fueled investments in AI data centers, asserting that India’s lower data center costs make it an attractive location for AI training and inference. With a balanced approach to financing, TCS does not foresee significant downside risks in its investment strategy.
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