Tata Consultancy Services is building a team of up to 8,900 forward-deployed engineers and evaluating acquisitions in artificial intelligence, data security and cybersecurity, two company executives said, as India’s largest IT services firm bets that AI will create new business rather than undermine its outsourcing model.
The forward-deployed engineer group would represent 1% to 1.5% of TCS’s global workforce based on its end-June headcount, chief executive K Krithivasan said. He did not say whether the roles would be filled through external hiring or by reskilling existing staff.
The engineers are intended to embed directly with client teams to speed AI adoption and customize tools for individual businesses. This is a model also being expanded by OpenAI, and Anthropic. “Clients want AI that works inside their businesses, not just pilots on a slide deck,” one person familiar with TCS’s strategy said, speaking on condition of anonymity to discuss internal planning.
The strategy comes amid investor concern that AI could disrupt India’s $315 billion IT services industry by reducing demand for engineering teams, shortening project timelines and squeezing prices as clients seek a share of the productivity gains AI tools generate. Krithivasan rejected the idea that AI would hollow out the outsourcing business. “What you need is a deep knowledge of the customer environment to make it work,” he said, adding that the differentiation “has nothing to do with cost arbitrage.”
TCS is also actively pursuing acquisitions after largely relying on organic growth until late 2025, a shift chief financial officer Samir Seksaria described as an effort to strengthen the company’s positioning. “We are looking at where we can find things which will help us enable or enhance our strategic positioning,” Seksaria said. No acquisition targets have been named. The company’s recent $700 million purchase of Coastal Cloud puts it in more direct competition with Accenture, which has pursued acquisitions more aggressively in recent years.
The push comes as TCS’s own AI business shows signs of slowing. The company’s annualized AI revenue, now roughly $1.5 billion, grew 13% in the June quarter, down from 28% in the prior quarter. Krithivasan said he would like the business to sustain roughly 25% quarterly growth over the long term but does not expect that trajectory to be linear. Seksaria said TCS spends approximately $1 billion annually on talent development and internal AI capability.
TCS has navigated previous major technology transitions, including Y2K remediation and the shift to cloud computing, largely by retraining its existing workforce and expanding its service lines. Further detail on recruitment plans, training programs and potential acquisitions is expected in upcoming earnings calls.
