‘We sent just 500 people from India to the US on H-1B visas. There is no dependence on H-1B visas.’
India’s largest information technology services provider Tata Consultancy Services (TCS) has been in the news for the past three months, first for laying off around 12,000 employees and more recently over the H-1B visa issue.
In an interview with Shivani Shinde/Business Standard in Mumbai, Chief Executive Officer K Krithivasan discusses the layoffs, visa challenges, AI strategy, and the company’s next major focus on data centres.
You mentioned that TCS performed well in the second quarter despite macro challenges, yet uncertainty persists. How do you see the next two quarters shaping up?
There is a small positive bias, as the number of deferrals — where projects are being paused — has come down slightly sequentially.
Almost all verticals, except the consumer business, have turned positive.
Across geographies, all except the UK have performed well. In the UK, we faced a specific situation in an insurance claim where the price per policy saw a steep decline.
What’s also making us confident is our big-bet strategy. Almost all service lines are driving growth, particularly AI and data, albeit from a small base.
The recent US decisions on H-1B visas have significantly impacted the industry. What’s your perspective on this environment, and what implications does it have for the largest IT services player?
We have 31,000 to 32,000 employees in the US, of whom only 11,000 to 12,000 are on H-1B visas, while the rest are on other types of visas.
We have been progressively increasing local workforce participation, which will continue because the way of work has changed with new kinds of projects and AI coming into play, where you need to work closely with the customer and need different skill sets.
It is not just about engineering skills anymore; there is a growing demand for creative thinking and prompt engineering skills.
In FY26, we sent just 500 people from India to the US on H-1B visas, which means we can survive without them (H-1B visas). There is no dependence on H-1B visas.
But, for a long period, H1-B visas were part of not only the cost policy but also the retention policy…
Times have changed. There was a time when this was a significant retention policy, but over the past four-five years, it has been on a declining trend.
It is now far less of a retention policy than it once was, and we should not be assessing today’s scenario through yesterday’s lens.
Can you comment on the letter from US Senators Chuck Grassley and Dick Durbin which questions TCS for laying off over 12,000 employees globally while simultaneously hiring more than 5,500 H-1B workers?
I was neither happy nor unhappy. It gave me an opportunity to articulate our positions more clearly and to address the senators’ questions about the H-1B issue.
First of all, we discussed the figure of 5,500. Most of these numbers relate to people who are amending or renewing their petitions; they are not fresh approvals.
Fresh approvals are much lower, probably around 2,500. However, everything is recorded as an application or petition, which often causes confusion.
It also allowed me to explain what we are doing, including the steps we are taking to work with local academia, where we are deeply involved.
In the US, we train and recruit people. We hae a large training centre in Cincinnati.
We work with schools and tell students that STEM (science, technology, engineering, and mathematics) education is an important career choice.
TCS aims to become the largest AI-driven technology services company. But what does that really mean?
We have been focused on this for some time. We discussed how we have been training all our associates and the platforms we have been building based on client demand.
We have also been working with MIT to explore what could be the next frontier.
Our strategy rests on five pillars: Internal transformation, transformational services, workforce transformation, and the transformation of both value chain and broader ecosystem.
We’ve strengthened our leadership and brought in Aarthi to drive all service lines.
We got Amit Kapoor, previously heading the UK operations, to lead the AI unit.
Janardhan Santhanam was appointed CIO to lead internal cultural transformation, while Mangesh Sathe took on the role of overall strategy officer to steer mergers and acquisitions.
Why are you focusing on data centres?
We do it because it gives the opportunity to offer an end-to-end solution. In India, we are providing sovereign cloud as an offering, and for some customers, we are providing private cloud.
There are many clients with whom we are undertaking significant AI work in India.
Having a data centre allows me to create a private cloud for them and offer it as a service. It helps working with the hyperscalers.
They want this pure play; AI players want it, and so do deep-tech companies.
There is considerable synergy, with benefits flowing in multiple directions from being a central player in the ecosystem.
Even some of these hyperscalers are keen to collaborate with us. The structure we are proposing is a mix of equity and debt.
For the equity portion, we are looking for financial partners to come on board.
About 150 Mw will require an investment of $1 billion. This is planned over 5 to 7 years.
Many employees have said they didn’t see these redundancies coming, especially given this is the Tata group. How would you respond to that?
Two groups of people have been impacted: Those on the bench for three to six months, and those affected by underperformance.
I don’t believe the Tata group, while humane, would have retained employees with performance issues.
Additionally, we have relieved individuals where we see a skill mismatch for the future.
The company is pivoting to be future-ready and a big player in the AI ecosystem.
If someone doesn’t fit into the scheme of things, we need to exit them gracefully. This approach, I believe, does not conflict with our ethos.
There’s also concern that bench players are under scrutiny, so the 2 per cent could end up being slightly higher…
Two per cent was the estimate at the time. I also want to differentiate between people on the bench who have not been able to deploy themselves and those who face a skills and capability mismatch, where they may not fit in for the future.
These are two different sets. If someone is unable to be allocated within a certain period, we believe the responsibility lies with both the organisation and the individual.
They need to be deployable and engaged with the customer; in that sense, I would consider it more of a performance issue.
Feature Presentation: Aslam Hunani/Rediff
