TCS expands AI push with plans for 8,900 deployment engineers

Tata Consultancy Services (TCS) plans to build a team of up to 8,900 forward-deployed engineers and is evaluating acquisitions in artificial intelligence as it bets the technology will create new business opportunities rather than weaken the outsourcing model, two TCS executives told Reuters.

The strategy comes as investors remain concerned that AI could disrupt India’s $315 billion IT services industry by reducing demand for engineering teams, shortening project timelines and putting pressure on pricing as clients seek a share of productivity gains.

“We would be … ensuring that we have as many as 1% to 1.5% of our associates who could be what you would call FDEs,” chief executive K Krithivasan said in an interview.

TCS is India’s largest software services company.

Based on the company’s headcount at the end of June, Krithivasan’s target translates to around 5,900 to 8,900 employees. He did not say whether the company would recruit externally or retrain existing employees.

Forward-deployed engineers work closely with clients to accelerate AI adoption and customise AI tools to business requirements. The role has emerged as a hiring bright spot as the technology sector adapts to AI-driven efficiency gains.

The move places TCS alongside companies including OpenAI, Anthropic and Microsoft, which have expanded hiring for forward-deployed engineers to help customers deploy AI tools.

The Mumbai-based company is also evaluating acquisitions in AI, data security and cybersecurity after largely avoiding acquisitions for years and relying instead on organic growth until late 2025.

“We are looking at where we can find things which will help us enable or enhance our strategic positioning,” chief financial officer Samir Seksaria said.

AI and the outsourcing model

Krithivasan rejected concerns that AI would disrupt the outsourcing business, saying companies will continue to need partners such as TCS to integrate and deploy AI systems.

“What you need is a deep knowledge of the customer environment to make it work. 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,” Krithivasan said.

He said companies are increasingly using multiple AI models and need partners such as TCS to connect those models with existing systems and manage data flows.

TCS’s annualised AI revenue growth slowed to 13 per cent in the first quarter from 28 per cent in the previous quarter.

Krithivasan said he would like the business to grow by about 25 per cent quarter on quarter over the long term but added that he did not expect a linear trajectory.

Seksaria said TCS spends about $1 billion each year on talent development and making AI accessible across the company, with a focus on training, targeted hiring and niche recruitment in AI-native technologies.

(With inputs from agencies)