What is your view on the recent US labour crackdown? Will it have any impact on TCS?
When you look at the issue being discussed, it is about applications for Green Cards from H-1B visas. If you look back, the number of H-1B visas we apply for has significantly declined over the years. The number of people converting from H-1B visas to Green Cards over the last two years would probably be in single digits. So, this is not a major issue for us.
We no longer rely on this mechanism to service our customers because we have shifted towards investing in and hiring local talent. More than 50 per cent of our employees in North America, which would be over 30,000 people, are local hires.
We made the shift to hiring talent locally, and therefore, this does not affect our customers or our business.
Have the recent developments at the Tata Sons board had any impact on TCS’s business? Have clients reached out with concerns?
There has been absolutely no impact on business, and no questions from customers. Especially this quarter, Krithi (K Krithivasan, chief executive officer and managing director) and I have met a lot of customers, and we have had customers visiting us here. There have been no questions or concerns from anyone.
This is probably the fifth consecutive quarter of positive momentum in the international business. Do you see this momentum continuing at the same pace, or do you expect it to improve?
If you look at this quarter, international business grew by 1.2 per cent, which is strong. We all know that the next quarter, Q3 of FY27, is a seasonally weak quarter because of furloughs. But client conversations and momentum continue to be good across all geographies, with the UK leading, while the US and Europe grew by around 0.4 per cent.
What is important is to look at the vertical performance behind this growth. BFSI, which is our largest vertical, has had two very strong quarters of high growth in Q1 and Q2. Manufacturing has again delivered growth of over 3 per cent, and the third vertical driving growth is technology services.
All the other verticals are also growing, except for two where we are seeing some softness. If I look at the performance over multiple quarters, the verticals are moving in the right direction.
TCS had announced its ambition to become a leading AI services player and taken several steps towards that goal. One year after that announcement, where does TCS stand on this journey?
This is a very pertinent question because it is also the anniversary of when we announced our aspiration. This ambition is underpinned by a five-pillar strategy, and it is resonating extremely well with our customers. Over the last year, we have been taking this strategy to all our customers and executing it on the ground.
We are making very good progress, which is reflected in the acceleration of our AI revenue. Our annualised AI revenue has increased from $2.6 billion to $3.1 billion.
But what is important to remember is that when we talk about customers and customer transformation, AI has become an umbrella term. It is AI plus digital and all the other technologies. There are still Cloud programmes and data modernisation projects to be completed. We need to look at AI as a pervasive force that has a role in everything an enterprise does.
Every conversation with every customer today involves AI. But the clarity, intent and capabilities we have developed over last year, and how we showcase these capabilities to customers, are helping us achieve better conversions.
We are also making progress on HyperVault (AI-ready data centre infrastructure provider and a subsidiary of TCS). Overall, we have made good progress, but there is a lot more to do because AI is changing every day.
One aspect of TCS’s AI transformation has been organisational restructuring, including changes at the senior leadership level and layoffs. From a talent perspective, do you think these changes are now complete?
Last July, we let go of a certain set of employees. It was all about creating a future-ready organisation. That part of the exercise is done, and we announced that at the end of Q4 of FY26.
Now, coming to the leadership rejig, this is something we go through as the organisation grows. I would not call it a very big rejig. We are organised by industries, and what we have done is create a few more focused industry segments that were earlier clubbed together.
Similarly, we wanted to bring more focus on deep-tech companies on the West Coast, so we created a separate segment. It was all about clustering industries in a way that brings greater focus.
More importantly, AI has to be deployed in an industry context. That was the second driver.
Third, it is always good to create more leadership roles because that creates excitement within the organisation. All of us grew because somebody gave us leadership opportunities. Creating more leadership positions also helps build a pipeline of future leaders.
