TCS scales down new H-1B hires in US, to focus on local recruitment

Tata Consultancy Services (TCS) is taking a clear stance on its US hiring strategy, with CEO K Krithivasan confirming that the company will scale down new H-1B hires this financial year.

TCS will now focus on recruiting talent locally, indicating a steady decline in the reliance on visa-based employees. Currently, around 11,000 of TCS’s roughly 32,000-33,000 US employees are on H-1B visas.

While media reports earlier said TCS plans to fully halt H-1B hires, the company has denied it.

"The CEO’s recent remarks emphasised that H-1B visas are no longer a primary retention or deployment tool, as was the case in the past. However, stating that TCS is no longer hiring on H-1B visas is incorrect. We continue to sponsor H-1B visas for select roles, particularly renewals and amendments, while placing greater focus on local hiring and retaining our existing US workforce," as spokesperson told The Federal.

Also Read: TCS headcount falls by 19,755 in Q2; union disputes figures

L-1 visa deployment

The media reports had quoted Krithivasan as saying that even among those approved, TCS will deploy fewer people than the number of approvals each year. He added that L-1 visas serve very specific purposes but are not intended to replace H-1B positions, the reports said.

"Our FY26 deployment of around 500 employees on H-1B visas reflects a strategic shift, not a complete exit. This balanced approach allows us to remain agile amid evolving US immigration policies," the spokesperson said.

The development comes amid a muted demand environment for IT services, with weak client sentiment and restrained discretionary spending limiting growth. Notably, TCS recently implemented a 2 per cent headcount reduction. Krithivasan emphasised that the process was handled "with a great deal of compassion and care", offering fair severance to affected employees while keeping the broader workforce informed of the strategic rationale.

Five pillars of AI strategy

While the company navigates near-term challenges, it is making a big bet on artificial intelligence. TCS has announced a nearly USD 7-billion investment in AI data centres globally, part of its vision to become the world’s largest AI-led services company.

Krithivasan explained that the strategy rests on five pillars - transforming internal operations, enhancing client services, upgrading workforce capabilities, using AI to disrupt value chains, and deepening participation in the broader ecosystem.

The new AI data centres will enable TCS to provide end-to-end AI services, including cloud infrastructure, model training, and inferencing. The initiative is expected to benefit both Indian operations and global clients.

Also Read: TCS accused of forcing 2,500 Pune employees to quit; IT workers' body seeks CM intervention

Adapting to evolving competition

AI is now integrated into nearly all TCS projects, Krithivasan also confirmed, according to reports.

"Every project now is AI-led in some form. Drawing a clear line to differentiate AI-led projects is becoming harder," Krithivasan said, highlighting why the company is not releasing AI-specific revenue figures yet.

He expects that soon, almost all TCS projects will be AI-driven. Despite recent headwinds, TCS is cautiously optimistic about international revenue. Q1 saw a dip, but Q2 indicated improvement.

The company is also adapting to shifts in the competitive landscape, as Global Capability Centres (GCCs) have taken over some work previously managed by TCS, though many now function as collaborators rather than competitors.