**Bengaluru**: K Krithivasan, CEO of Tata Consultancy Services, warns of challenges from US tariffs affecting sectors like retail and travel. Despite a tough landscape, he remains optimistic about TCS’s future as clients seek to optimise costs and consolidate IT vendors.
BENGALURU – In a recent interview with Reuters, K Krithivasan, the Chief Executive Officer of Tata Consultancy Services (TCS), outlined the potential impacts of the ongoing trade tensions, particularly regarding tariffs imposed by the United States, on various sectors where the firm’s clients operate. He highlighted that industries such as retail, travel, and automobiles might experience significant challenges resulting from these tariffs, leading to a possible emphasis on cost-cutting measures if uncertainties continue.
Krithivasan specifically noted that while the banking and financial services sector—representing nearly a third of TCS’s revenue—remains unaffected by these developments, other sectors are at greater risk. “The consumer business, hospitality business, travel, auto industry are the businesses that we have to watch out for. If the uncertainty continues for longer, those businesses may have to focus more on cost optimization,” he stated, underscoring the need for vigilance in these areas.
TCS draws approximately half of its revenue from the North American market, which is crucial for Indian IT service providers, especially as they navigate the fallout from U.S. tariffs impacting their clients. The company reported missed earnings estimates for the fourth quarter and forewarned of delays in decision-making relating to discretionary projects among clients.
Despite the current challenges, Krithivasan expressed optimism regarding TCS’s future performance, projecting that fiscal year 2026 would yield better outcomes than the preceding year. He attributed this to the ongoing necessity for clients to upgrade legacy software and systems in the medium to long term.
In addition, Krithivasan discussed a trend of clients consolidating their IT vendors, which has been advantageous for TCS. “Particularly when customers look at cost optimization as a key focus area, they will try to reduce the number of service providers. TCS has been a beneficiary of these consolidations that have happened in FY25,” he explained, highlighting how the organisational strategy has allowed TCS to gain a larger share of the market amidst increasing competition.
As the trade landscape continues to evolve, TCS remains focused on navigating these challenges while exploring avenues for growth within existing client frameworks.
Source: Noah Wire Services
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