Tata Consultancy Services will build a team of up to 8,900 forward-deployed engineers as India's largest software services firm bets it can turn artificial intelligence into a hiring opportunity rather than a workforce threat, two TCS executives told Reuters.
The commitment comes as investor anxiety mounts over AI's potential to hollow out India's $315 billion IT services industry. Fears center on reduced demand for engineering teams, compressed project timelines, and downward pressure on prices as clients demand their share of productivity gains.
A Workforce Bet Against Automation
CEO K Krithivasan said in an interview that TCS would ensure "as many as 1% to 1.5% of our associates" become forward-deployed engineers. Based on the company's end-June headcount, that translates to roughly 5,900 to 8,900 employees. Krithivasan didn't specify whether TCS would hire externally or retrain existing staff.
Forward-deployed engineers embed directly with clients to accelerate AI adoption and customize tools for specific business needs. It's a role that's emerged as one of the few hiring bright spots in a sector wrestling with AI-driven efficiency gains that threaten traditional employment models.
The plan puts TCS in direct competition with OpenAI, Anthropic, and Microsoft, all of which have expanded hiring for forward-deployed engineers to help clients implement AI tools. The Mumbai-based company is also evaluating acquisitions in AI, data security, and cybersecurity after years of relying almost exclusively on organic growth until late 2025.
CFO Samir Seksaria said, "We are looking at where we can find things which will help us enable or enhance our strategic positioning."
Revenue Growth Slows Despite Optimism
Krithivasan dismissed concerns that AI would disrupt the outsourcing model, arguing companies still need partners like TCS to integrate and deploy AI systems. "What you need is a deep knowledge of the customer environment to make it work," he said. "That is where we differentiate ourselves. This has nothing to do with cost arbitrage. It's essentially because of the talent pool that we have built."
Companies increasingly use multiple AI models and require partners such as TCS to connect those models with existing systems and manage data flows, he said.
Yet the numbers tell a more complicated story. TCS's annualised AI revenue growth slowed to 13% in the first quarter from 28% in the previous quarter. Krithivasan said he'd like the business to grow about 25% quarter-on-quarter over the long term but doesn't expect a linear trajectory.
Investment in Worker Training
TCS spends about $1 billion annually on talent development and making AI accessible internally, with a focus on training, targeted hiring, and niche recruitment in AI-native technologies, Seksaria said. That investment reflects a broader question facing the industry: whether companies will retrain existing workers or replace them with new hires possessing AI-specific skills.
The forward-deployed engineer model represents a shift from traditional outsourcing's cost-arbitrage foundation to one centered on specialized expertise. Whether that shift creates enough high-skill jobs to offset automation's impact on routine engineering work remains an open question for India's massive IT workforce.
Why This Matters:
TCS's hiring plan offers a test case for whether AI will create quality jobs or simply concentrate expertise among a smaller, elite workforce while displacing routine engineering roles. India's IT services industry employs millions of workers, many in mid-skill positions now vulnerable to automation. The company's decision to invest $1 billion annually in training suggests recognition that workers need active support to transition into AI-era roles, not just market forces. Yet the slowing AI revenue growth and the relatively small forward-deployed engineer target compared to TCS's total workforce highlight the uncertainty facing workers across the sector. How companies balance retraining existing employees versus external hiring will determine whether AI's productivity gains are shared broadly or concentrated among those already positioned to benefit.