I couldn’t believe that Tata PR had actually prepared this release. And that someone like Eco Times doesn’t use ai to do a basic sanity and consistency check before publishing it.
How is it that TCS does not have a techie at a senior enough post to articulate and defend their narrative. Chandra is not a scientists or professor or engineer or mba. He is at most a generalist with a prior history of running a sweat shop with a average staff CTC of Rs 50k pm – around 30% lower than the cost of a Level 1/ Grade IV govt employee.
Let’s look at the quotes from the article:
1. TCS expects to slow down hiring as artificial intelligence (AI) agents work alongside human employees at scale.
Let us assume this statement as home truth and then look at everything else in the context of the home truth. The home truth is that every IT company is going to downsize. And they would have to spend money on VRS to accelerate exits.
2. the company will have half a million AI agents,
Half a million agentic agents at usd 500 pa is USD 250 million. Reality is that agents cost Rs 4.5 lacs pa. Or USD 5000. That adds up to USD 2.5 Billion. This purchase would decimate their profits completely.
3. AI would eventually create demand for new categories of talent
Sure it might or might not. But that has no relevance to TCS. The company is not able to get one presentable ai person to address media. I am sure Chandra is a genius in more ways than one. But not in ai.
4. “100% of the revenue will have an AI component”
The issue is ai cost vs incremental revenue. This is a negative sum.
4. By 2028 to 2030, 100% of the revenue will have an AI component.
That would give the firm a negative profit. TCS would be a meal ticket for Ai companies.
5. AI is not a threat to the IT services industry
Now this is a statement which deserves to be framed and put outside every TCS office.
Even Nira Radia never ever made such an indefensible statement when heading PR for TCS
Every time staff passes by, they would be reminded of the urgency to look for a new job.
6. the market had misunderstood the relationship between AI and technology services.
Not really. America understood. Others are still trying to. Esp TCS
7. I am of the firm belief that every technology disruption enhances tech spending
The whole objective of ai is to reduce the spending.
8. investors should not mistake the current slowdown in growth as a sign of structural weakness.
An industry is about to be destroyed. The reality is structural destruction.
9. Whenever the industry transition happens, the price-to-earnings multiples fall
Fall in P/E indicates that the market expects future earnings to go down.
10. AI should be viewed as an “infrastructure of intelligence” that will expand technology spending
But that revenue may not come to TCS.
11. global enterprise IT is expected to double to $3 trillion over the next few years.
That is the revenue that ai companies are chasing.
