TCS CEO K Krithivasan told Moneycontrol that the move is not linked to AI, but a skill mismatch and not that they need less people. “We will continue to look for high (quality) talent, acquiring talent, training talent. This is more about where there is a feasibility of deployment,” he added.
Post the hiring spree during the Covid-19 book, headcount of Indian IT companies have seen a decline in the last two years. TCS’ headcount has declined by 2,249, while Infosys and Wipro have seen a decline of over 12,000 and 25,000 employees respectively.Citi has maintained its “sell” recommendation on TCS with a price target of ₹3,135, saying that there could be multiple reasons behind this move, including pressure on margins, demand and skill mismatch and productivity asks.
The recent quarterly results also suggest continued sluggishness in core markets. The brokerage also said that margin and cash flow trends in the near-term will have to be monitored.Jefferies wrote in its note that this move could lead to execution slippages in the near-term and higher attrition in the long-term.
“With most deal wins being led by cost-optimisation initiatives and involving AI-led productivity pass through, IT firms unable to gain market share may resort to lay-offs,” Jefferies wrote.
Jefferies remains selective with Infosys, HCLTech, Coforge and Mphasis continue to remain their preferred large and midcap picks.
Out of the 51 analysts that cover TCS, 32 still have a “buy” rating on the stock, 15 say “hold”, while four have a “sell” recommendation.
Shares of TCS are trading 1.5% lower at ₹3,090 in early trading on Monday. The stock had already declined 10% in the last one month in the lead up to this announcement.
First Published: Jul 28, 2025 7:55 AM IS
