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Tata Consultancy Services (TCS) CEO K Krithivasan has raised concerns over the potential impact of ongoing U.S. tariffs on key sectors like retail, travel, and automobiles. In an exclusive interview with Reuters, Krithivasan highlighted that prolonged uncertainty could push clients in these industries toward aggressive cost-cutting measures. However, he noted that the banking and financial services sector, which drives nearly one-third of TCS’s revenue, remains insulated from these trade disruptions.
"The retail, hospitality, travel, and auto sectors are the ones to watch. If tariff uncertainty drags on, these businesses may prioritize cost optimization," Krithivasan said. "For now, we haven’t seen major shifts, but we’re monitoring closely."
Retail and manufacturing rank as TCS’s second- and fourth-largest revenue sources, with banking leading the pack. With North America accounting for roughly half of TCS’s revenue, the Indian IT giant is navigating choppy waters as U.S. clients grapple with tariff-related challenges under President Donald Trump’s fluctuating trade policies.
TCS recently reported weaker-than-expected fourth-quarter earnings, citing delays in clients’ discretionary project decisions amid market unpredictability. Despite this, Krithivasan remains upbeat, predicting the uncertainty will be “short-lived” and forecasting a stronger fiscal year 2026, fueled by demand for legacy software upgrades.
Krithivasan also pointed to a silver lining: clients consolidating IT vendors to streamline costs. “In FY25, we’ve seen customers reduce their service providers to optimize expenses, and TCS has emerged as a key beneficiary,” he said.
Disclaimer: Views expressed by corporate leaders are their own. Jobaaj recommends consulting certified experts before making investment or business decisions.
