Synopsis

TCS expects about 80% of its new hires to have digital and AI-related skills as the company shifts towards more AI-led work. With AI-linked revenue already accounting for around 10% of its business, TCS also expects a greater share of such deals to support margins, while continuing to invest in niche talent, acquisitions and partnerships.

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Mumbai: As much as 80 per cent of TCS' new hires will be talent with digital and Artificial Intelligence (AI) skills going forward, a top company official has said.

With the share of AI-led work in overall revenue growing to 10 per cent in the recently concluded September quarter, the country's largest IT services company said a growth in the share of AI revenues will help it expand its profit margins, which remain below its aspirational levels.

"Of the 4,500 that we have added in Q2, I would say safely 25 to 30 per cent are pure AI and total about 80 per cent is new age," the company's chief operating officer Arathi Subramanian told PTI here.

When asked if the same proportion will continue going ahead as well, she replied in the affirmative and added that the desired talent is available in the market.

When asked if it is advantage for freshers over the mid-career professionals in this sort environment, where their AI-nativity and relatively lower costs would be of help to the former, she said that it is advantage for people willing to "unlearn and learn".

"If a mid-level engineer is willing to learn, it gives a huge advantage because he or she understands what is the technology landscape, what is the domain," the company's chief executive and managing director K Krithivasan added, pointing out that a junior engineer may not be able to understand the same.

The company will continue investing in "niche talent" going forward as well, Krithivasan said, adding that mergers and acquisitions and partnerships will be other areas of investments.

Krithivasan said the trend of growth in AI revenues will also help from a profitability perspective.

"As these (AI) deals increase in volume, you would see that there will be margin (benefit)," he said.

Subramanian said customers are signing up for an AI deal in a small vertical, and expanding then asking for an expansion of the same work in other areas as well once the efficacy of the spending gets established.

To a question on what is the proportion of AI in new deal signings and how much of the USD 9.6 billion in total contract value of Q2 is AI, Krithivasan said the company is very conservative while classifying a deal as a an AI one, but added that there is some aspect of AI in virtually all the work that it is doing at present.

When asked if two recent deal wins on Porsche and Best Buy, where a contract is accompanied with absorbing the clients' staff into TCS, portends to challenges in the market, Krithivasan replied in the negative.

"These two are opportunities where our customers come to us and we have discussions on how we help them transform themselves and make them AI first," he said.

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