Tata Consultancy Services (TCS), India's leading IT services company, has recently been in the news for both workforce restructuring and a significant new partnership. The company has addressed claims of large-scale layoffs while simultaneously announcing a strategic collaboration with Kesko, a major Finnish retail group.

Layoff Controversy and TCS's Response

TCS has rejected claims of planning 30,000 layoffs following protests by the Union of IT & ITES Employees across multiple cities. The company confirmed that layoffs are limited to 2% of its global workforce, totaling approximately 12,000 positions, primarily targeting senior and managerial levels. However, the union has disputed this figure, with officials suggesting that 30,000 to 40,000 employees could potentially lose their jobs.

Protesters have demanded that TCS withdraw the decision and have called for government intervention. The union has also alleged that TCS is replacing experienced employees with freshers at 80-85% lower pay and has demanded upskilling of existing staff instead of layoffs.

Strategic Partnership with Kesko

Amid these workforce challenges, TCS has announced a significant partnership with Kesko to spearhead a comprehensive digital transformation across the Nordics and Baltics. This collaboration marks a pivotal step in Kesko's journey to modernize its operations and enhance its competitive edge in the retail landscape.

AI-Powered Retail Innovation

The multi-year partnership aims to leverage artificial intelligence (AI) and intelligent automation to revolutionize Kesko's retail operations. TCS will deploy its expertise to improve operational efficiency, accelerate time-to-market for new initiatives, and drive innovation across Kesko's diverse business portfolio, which spans grocery, car, building, and technical trades.

Scope of the Partnership

TCS's engagement with Kesko encompasses several key areas:

1. SAP S4 Transformation: Modernizing Kesko's core technology infrastructure.
2. Digital Development: Creating next-generation digital services to enhance customer experiences.
3. Application Managed Services: Providing comprehensive support for Kesko's digital applications.
4. Intelligent Automation: Implementing AI-driven solutions to optimize retail processes.

Geographical Reach

The partnership will impact Kesko's operations across multiple countries, including Finland, Sweden, Norway, Denmark, Poland, Estonia, Latvia, and Lithuania.

Technological Edge

TCS will employ its advanced AI and machine learning capabilities, including TCS ignio™ AIOps for autonomous IT issue resolution and the TCS RiO™ (Rigor in Operations) framework for full-stack observability and proactive incident management.

Looking Ahead

As TCS navigates the challenges of workforce restructuring, the partnership with Kesko represents a significant move towards creating a more agile, efficient, and customer-centric retail environment. This collaboration is set to create new benchmarks in AI-driven retail operations and customer experience enhancement, while also reinforcing TCS's position as a leader in providing innovative IT solutions to the retail industry.

The contrasting developments of job cuts and new partnerships highlight the complex dynamics in the IT services sector, where companies must balance workforce optimization with the pursuit of growth opportunities in an increasingly competitive global market.

Tata Consultancy Services (TCS), India's leading IT services provider, has made significant moves in both the stock market and its global operations. The company recently executed a substantial block trade and expanded its presence in Latin America with a new AI-enhanced facility.

Block Trade on NSE

TCS executed a block trade on the National Stock Exchange (NSE) worth ₹167.86 crores. The transaction involved approximately 556,246 shares, with each share priced at ₹3,017.80. This sizeable trade demonstrates continued interest in TCS stock among institutional investors.

Launch of AI-Powered Operations Center in Latin America

In a strategic move to bolster its global presence and technological capabilities, TCS has launched a new AI-enhanced operations center in Latin America. The facility, located in Mexico City, marks TCS' eighth operations center in Mexico, further solidifying the company's commitment to the region.

Key Highlights of the New Center

• Location: Mexico City, Mexico
• Focus: AI-driven operations and innovation
• Workforce: To be staffed with AI specialists and software engineers skilled in emerging enterprise technologies
• Services: Offering solutions in AI, cloud, cybersecurity, IoT, IT infrastructure, application development, and cognitive business operations

Strategic Importance

The new center is a crucial component of TCS' growth strategy in Latin America. It is expected to:

1. Generate new employment opportunities in Mexico over the next two years
2. Serve as an innovation hub for collaboration with local and international clients
3. Strengthen TCS' position as a strategic partner in the digital transformation of Mexico and Latin America

Leadership Perspectives

Rajeev Gupta, Head-Nearshore LATAM and Country Head - Mexico, TCS, stated, "The launch of our AI-powered office in Mexico City marks a significant milestone in our journey towards delivering cutting-edge solutions for all our customers in the country."

Marcelo Wurmann, CEO - Latin America, TCS, added, "Since we began operations in Mexico, over two decades ago, we have recognized that this country is a key pillar of our growth in Latin America."

TCS in Mexico

Government Support

Marcelo Ebrard, Economy Secretary of Mexico, welcomed TCS' expansion, stating, "The investment and creation of high-quality jobs that TCS brings with this new center are crucial to the development of our digital economy and the positioning of Mexico as a center for technological innovation."

This expansion reinforces TCS' role as a catalyst for innovation and inclusive growth in Mexico and Latin America, aligning with its global strategy of fostering local talent and driving digital transformation across markets.