BENGALURU: TCS’s sequential lacklustre performance can be attributed to deferral of discretionary spends by clients and seasonal effect, CEO
K Krithivasan
said. He, however, remains optimistic about the prospects for 2025, surpassing the previous year’s performance. He spoke to TOI about H-1B visa matters and the company’s business outlook. Excerpts.
TCS is one of the largest beneficiaries of H-1B visas. With Trump returning, do you think ‘nearshore’ will gain momentum?
On an annual basis, we get between 3,000 and 4,000 H-1B visas for a workforce of, say, 600,000. That’s a very small number. Even within the US, more than 50% of the workforce is locally hired. In fact, on an incremental hiring basis, we probably hire much more than 50% every year in the US compared to the H-1B workforce. So, our dependence on H-1B is quite limited. Whether it’s offshore, nearshore, or onsite, all of them have a particular role to play. Nearshore exists because we sometimes want to provide the same-time zone service to our customers. We are very bullish on our
nearshore operations
. For instance, we do a lot of work in Mexico for North America. That’s a thriving business and it’s growing very well. We are confident of managing potential changes in immigration regulations.
There are structural shifts in the industry… Companies are achieving productivity gains without adding headcount..
New technologies can bring about greater productivity. AI is a disruptive change in software engineering. Even in the last 10 or 15 years, productivity improved constantly due to new tools and accelerators. This technology shift is a continuation in productivity, and there will be significant improvements in certain kinds of jobs. It is going to create new kinds of roles that did not exist before. From a TCS perspective, we are leading customers in adopting the change both from a software engineering perspective and in terms of how we leverage this technology. Within TCS, we already trained more than 500,000 associates in understanding GenAI and deploying it for our customers.
TCS’s performance was affected by seasonality and a softer discretionary and demand environment..
We did call out in Q3 (Dec quarter) the continuing headwind around the deferral of discretionary spend, or that uncertainty continued. Second, another headwind was the seasonal weakness of Q3 itself, and that resulted in us having a sequential negative growth in multiple geographies.But going forward in Q4, based on the client discussions we are having and the order book, it gives us confidence that multiple geographies will get into the growth path in the medium term.
