Trump's visa storm masked TCS's AI woes. They are back in focus

Core Insights - Tata Consultancy Services (TCS) is facing challenges in selling AI services and products, particularly in the US market, which is its largest [1][5] - The company has undergone multiple leadership changes in its AI division, indicating uncertainty in its AI strategy [2][3] - TCS is laying off 12,200 mid- to senior-level executives, representing 2% of its workforce, to prepare for future demands [2] AI Strategy and Market Position - TCS's AI business has been restructured several times in the past three years, reflecting its struggle to adapt to new technology [2][3] - The Indian AI services market is projected to be worth $17 billion by FY27, and TCS risks falling behind competitors like Accenture, which has already seen significant success in this area [3][12] - TCS's AI.Cloud business unit was established in August 2023, but it has since been split into AI & Data and Cloud units to sharpen focus [7][8] Financial Performance - TCS reported $30.18 billion in revenue for the last fiscal year, marking a growth of only 3.78%, the lowest in four years [12] - The company's stock has declined nearly 15% since the launch of ChatGPT in November 2022, and 29.3% since the beginning of the year [11] - Accenture reported $2.7 billion in revenue from Gen AI, a threefold increase from the previous fiscal year, highlighting TCS's struggle to generate similar revenue [13][15] Talent and Hiring Challenges - TCS has reduced hiring of AI engineers due to low demand, having hired around 1,000 AI engineers last fiscal year [6] - There is a noted deficit of skilled AI professionals in the market, complicating TCS's ability to expand its AI capabilities [6] Competitive Landscape - Accenture has significantly outperformed TCS in the AI space, with a rapid increase in AI professionals and successful project implementations [14][15] - TCS's challenges in AI strategy come at a time when Accenture is demonstrating strong growth and leadership in AI, emphasizing the need for TCS to adapt [13][16]