The future of work is here, and it’s increasingly powered by Artificial Intelligence. India’s IT bellwether, Tata Consultancy Services (TCS), is not just observing this shift; it’s actively building its foundations, literally, with plans for a colossal AI data centre in India. However, this strategic pivot comes hand-in-hand with significant workforce restructuring, raising questions about AI’s evolving role in the Indian job market.
A Gigawatt Leap into AI Infrastructure
In a move underscoring its ambition to become the world’s largest AI-led technology services company, TCS has announced plans to establish a 1 Gigawatt (GW) AI data centre in India. This monumental project, with an estimated investment of ₹42,000 crore (approximately $5 billion), is slated to be operational by 2028. Reports from the Economic Times and Business Standard on October 8, 2025, highlight the strategic importance of this venture.
The facility, likely to be located in Gujarat or Maharashtra, will be capable of supporting a staggering 100,000 Nvidia H100 GPUs or equivalent – essential for high-intensity AI training and inference workloads. TCS is partnering with Nvidia for cutting-edge GPUs and Tata Power for sustainable renewable energy solutions, aligning with global trends in green data infrastructure. This initiative is not just about raw computing power; it’s designed to bolster India’s burgeoning AI ecosystem, serving global enterprises and Indian AI startups alike.
Powering the Digital Bharat
This investment aligns perfectly with India’s broader vision to become a global AI and cloud computing hub, reinforced by initiatives like the India AI Mission. India’s data centre market, currently valued at $10 billion, is projected to grow at a 20% Compound Annual Growth Rate (CAGR), while its AI market, at $15 billion, expects a 25% CAGR. TCS’s data centre will contribute significantly to the country’s data localisation mandates, enhancing digital sovereignty.
The company’s CEO, K Krithivasan, stated, “Our 1 GW AI data center will position TCS as a leader in AI infrastructure, crucial for next-gen digital transformation.” Furthermore, the project is expected to generate 10,000 jobs, indicating a potential shift in the demand for specialized AI infrastructure and data management skills. This move also follows TCS’s recent acquisition of ListEngage, a Salesforce partner, to enhance its enterprise solutions and AI-powered automation capabilities.
Workforce Restructuring
While TCS is making significant strides in AI infrastructure, its workforce has seen notable changes. The company recently undertook a restructuring effort, resulting in the reduction of approximately 12,000 employees, about 2% of its global workforce, in the fiscal year 2025-26. This predominantly impacted mid- and senior-level positions, reflecting a strategic realignment towards emerging technologies like AI, data analytics, and cybersecurity.
During its Q2 FY26 earnings, TCS reported a one-time restructuring charge of ₹1,135 crore (approximately $136 million). While union claims of much larger layoffs (50,000-100,000) have been denied by TCS, stating the impact is limited, the Q2 FY26 disclosures did show a net headcount decline of 19,755 employees from the previous quarter. This reduction, TCS clarifies, is part of adapting to new technological trends and ensuring agility.
Interestingly, TCS has been proactive in reskilling its existing talent, with over half of its 600,000+ employees trained in AI, Machine Learning, and Generative AI. This indicates a dual strategy: optimizing the existing workforce while investing heavily in future-ready AI capabilities. The shift highlights a broader industry trend where automation and AI are reshaping job requirements, necessitating continuous upskilling and a focus on higher-value tasks.
Navigating the AI Wave
TCS’s twin strategies of massive AI infrastructure investment and workforce recalibration illustrate the complex dynamics of the AI revolution. It’s a clear signal that companies are willing to commit significant capital to seize the AI opportunity, even if it means streamlining human capital in roles prone to automation. India’s IT sector is at the forefront of this transformation, balancing the need for technological advancement with the imperative of human-centric growth. The success of this balance will define India’s position in the global AI landscape.
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