What happens when India’s largest IT services company tells employees to use artificial intelligence even if it eats into existing revenue? That is exactly the message coming from Tata Consultancy Services.

In a move that signals a structural shift in the IT services industry, TCS urges staff to use AI despite revenue risk. According to reports by NDTV and Business Standard, CEO K Krithivasan has encouraged employees to adopt AI tools proactively, even if it leads to cannibalisation of current revenue streams.

This is not a defensive move. It is a strategic reset.

Why TCS Is Pushing AI Adoption Aggressively

Tata Consultancy Services is the largest IT services firm in India by market capitalisation and revenue. It employs over 600,000 people globally. When a company of this scale urges staff to use AI despite revenue risk, it reflects confidence in long-term transformation.

The CEO’s message is clear. If AI can automate tasks that currently generate billable hours, the company should still adopt it. The logic is straightforward. If TCS does not disrupt itself, someone else will.

Across the IT services industry, billing models have traditionally been based on manpower and time. AI changes that equation by enabling automation, faster delivery, and reduced effort. That can shrink short-term revenues but improve competitiveness.

The Bigger Trend in the IT Services Industry

The global AI market is projected to grow rapidly over the next decade, with estimates from major research firms placing it in the hundreds of billions of dollars. Enterprises are under pressure to deploy generative AI, automation, and AI-driven analytics with many companies enforcing mandatory AI use on their employees.

Indian IT majors including Infosys and Wipro have also invested heavily in AI platforms and partnerships. However, openly acknowledging revenue cannibalisation as a trade-off is a notable shift.

When TCS urges staff to use AI despite revenue risk, it signals that traditional billing models may no longer define growth. Instead, value-based pricing, AI-led consulting, and platform solutions could become the new drivers.

Risks: Revenue Cannibalisation and Workforce Anxiety

There are real risks.

If AI tools reduce the need for manual coding, testing, or maintenance, billable hours may decline. That directly impacts short-term revenue metrics. Investors typically watch quarterly performance closely.

There is also workforce anxiety. Employees may fear job displacement. While TCS has emphasised reskilling and AI integration rather than layoffs, the transition requires large-scale training and cultural change.

Ethically, companies must ensure responsible AI deployment. Bias, data privacy, and client confidentiality remain critical concerns. Adoption without governance can damage trust.

Strategic Advantage: Self-Disruption Over Stagnation

History shows that companies that fail to embrace technological shifts often lose market share. By encouraging AI usage internally, TCS is effectively stress-testing its own model.

This approach could help TCS move up the value chain, offering AI strategy consulting, enterprise transformation, and AI-native solutions. In the long run, that may offset initial revenue dips.

When TCS urges staff to use AI despite revenue risk, it positions itself as a transformation partner rather than just a manpower supplier.

What This Means for Clients and Investors

For clients, this could mean faster delivery, lower costs, and more innovation. For investors, it signals short-term volatility but long-term positioning.

The key question is execution. Can TCS retrain its vast workforce quickly enough? Can it transition from effort-based billing to outcome-based pricing without margin pressure?

If successful, this strategy could redefine how large IT services firms approach AI.

Conclusion: A Calculated Gamble on AI

TCS is making a deliberate bet. By telling employees to prioritise AI even at the cost of existing revenue, it is choosing transformation over protectionism.

In a world where generative AI tools are reshaping software development and consulting, waiting is riskier than acting. The message is simple. Adapt now or become irrelevant later.

Fast Facts: TCS AI Risk Explained

What does it mean when TCS urges staff to use AI despite revenue risk?

It means Tata Consultancy Services (TCS) is encouraging employees to adopt AI tools even if it reduces current billable work, prioritising long-term competitiveness over short-term revenue stability.

Why would TCS accept revenue cannibalisation?

When TCS urges staff to use AI despite revenue risk, it reflects a strategy of self-disruption. Adopting AI early helps protect market share and enables higher-value services in the future.

What are the main risks of this strategy?

The main risks of TCS urging staff to use AI despite revenue risk include short-term revenue pressure, workforce anxiety, and the need for strong AI governance to manage ethical and data security concerns.