Tata Consultancy Services plans to assemble a team of up to 8,900 forward-deployed AI engineers and is exploring acquisition opportunities in AI and cybersecurity, according to chief executive K Krithivasan.

The initiative represents India's largest IT company addressing concerns about the future of its engineering services model amid the rise of agentic AI in enterprise environments.

Krithivasan stated that TCS intends to shift between 1% and 1.5% of its associate workforce into forward-deployed engineering positions. With a headcount of 593,798 as of the end of June, this equates to approximately 5,900 to 8,900 individuals.

The concept draws from AI labs, where forward-deployed engineers embed within client operations to ensure models deliver practical results. Chief operating officer Aarthi Subramanian characterized them as versatile specialists with deep expertise in specific domains, essentially the experts deployed to bridge gaps when initial pilots encounter real-world production challenges.

Krithivasan presented the program as proof that AI generates employment opportunities instead of eliminating them. He left unclear whether these engineers would come from external hires or internal retraining, a key factor given the scale of nearly 600,000 employees.

TCS added 9,279 employees during the June quarter, marking its second straight period of headcount expansion following prior reductions. Net profit increased roughly 5% year over year to ₹13,349 crore, supported by revenue growth of 14% to ₹72,275 crore and an operating margin of 24%.

"Q1 FY27 reflects continued growth momentum and the strength of our strategic positioning, despite geopolitical and macro-economic headwinds," Krithivasan noted with the results, which included a ₹12 interim dividend. The 14% revenue increase signals resilience rather than decline, though further quarters will test the approach.

The company recorded a $9.5bn order book for the quarter, featuring an AI-driven transformation project with Swedish bearings manufacturer SKF, and indicated its AI operations now generate an annualized revenue run rate of $2.6bn based on internal figures. Investors will closely monitor this metric as it separates AI-related income from traditional services.

The underlying concern involves India's $315bn IT services sector, which relies on billable effort. Clients anticipating efficiency gains from AI may seek reduced pricing to capture productivity benefits.

Acquisitions form another element of the strategy. Krithivasan confirmed TCS is evaluating targets in AI and cybersecurity without disclosing specific candidates, funding amounts, or schedules.

TCS joins peers in positioning closer to advanced AI layers. Recent ecosystem moves by major AI providers have drawn in global consultancies, highlighting where integration margins are expected to concentrate.

India is simultaneously advancing in hardware, as CG Semi launched commercial chip production at its $870m Gujarat facility this month. Services leaders and semiconductor operations now pursue overlapping opportunities.

TCS has yet to detail pricing structures for these forward-deployed engineers. Traditional hourly billing models face challenges when the role involves deploying technology designed to reduce overall project hours.

The company is scheduled to report again in October. At that point, attention will focus less on the 8,900 target and more on whether the $2.6bn AI run rate expands ahead of any impact on core business volumes.