'AI could replace the need for call centres': TCS CEO Krithivasan

K Krithivasan believes that the demand for IT talent will always increase and employment will not be in trouble

Artificial intelligence (AI) advancements will lead to a significant reduction in the need for call centres within a year, the chief executive of Tata Consultancy Services (TCS), K Krithivasan, told the Financial Times (FT). This could fundamentally transform the industry that had been a major source of employment in countries like India and the Philippines.

According to the report by FT, Krithivasan envisions a future where call centres receiving incoming calls become rare and replaced by proactive AI systems capable of predicting and addressing customer issues before they arise. He believes that chatbots equipped with generative AI will be designed to analyse customer transaction histories and perform tasks traditionally handled by call centre agents.
 

 

While acknowledging that this transformation might take some time to materialise fully, Krithivasan expects significant progress within a year.

When asked about the impact this may have on employment, Krithivasan argued that the demand for tech talent would increase, not decrease. He emphasised the need for workforce training to meet this demand, especially in India.

India's largest IT services player on April 12 reported a net profit of Rs 12,434 crore for the fourth quarter of financial year 2023-24 (Q4 FY24), up 9.1 per cent year-on-year (Y-o-Y). The company also reported a revenue of Rs 61,237 crore for the quarter, a 3.5 per cent Y-o-Y increase and a one per cent rise from the previous quarter. In comparison, Infosys had reported a 30 per cent Y-o-Y increase in its net profit at Rs 7,969 crore in Q4 FY24, while its revenue for the quarter grew by 1.3 per cent Y-o-Y to approximately Rs 37,923 crore.

Krithivasan explained that past IT services spending was clouded with "uncertainty" due to factors like inflation, geopolitical tensions, and past elections, which had led businesses to postpone investments in new tech projects. He explained that this uncertainty had contributed to a decline in TCS's annual revenue growth.

Krithivasan added that TCS itself has a pipeline of generative AI projects worth $900 million.

During its announcement of the company's Q4 financial results, Krithivasan also said that since the launch of its AI.Cloud business unit, TCS, has witnessed more traction in the marketplace.

"We have won more than 200 engagements in artificial intelligence (AI) so far this year. The number of engagements going into production is also increasing," he said.