A Jefferies report warns that the IT services sector is set for a structural shift due to AI, requiring talent and operating model overhauls and increasing cyclicality.
The Nifty IT index hit a more than nine-month low, trading at its weakest level since April 17, 2025.
'When it comes to enterprise context, there is a big lag between how fast technology is evolving and how it is getting deployed at the end of the day. That is where the challenge is going to be.'
AI will erase outsourcing jobs, redefine skills and disrupt global giants within five years, predicts Vinod Khosla. The IT legend urges young people to become generalists: Adaptable thinkers who can learn quickly, connect dots across disciplines and shift careers as technologies evolve.
Indian information-technology (IT) service providers are likely to report another quarter (July-September) of low, single-digit growth owing to macro uncertainties, chiefly emanating from America, with no respite in sight even in the second half of the year.
The reduction in goods & services tax (GST) on individual life and health insurance premiums has been called a "landmark step" for making insurance affordable and inclusive. In a panel discussion at the Business Standard BFSI Insight Summit 2025, Anup Bagchi, managing director (MD) & chief executive officer (CEO) of ICICI Prudential Life Insurance; Mahesh Balasubramanian, MD & CEO of Kotak Life Insurance; Tarun Chugh, MD & CEO of Bajaj Life Insurance; and Ratnakar Patnaik, MD of Life Insurance Corporation of India (LIC), listed what else the industry needs to reach more people.
Bengaluru is at a critical juncture, where its economic model, reliant on attracting and retaining skilled professionals, is directly threatened by a measurable decline in urban quality of life, point out Shishir Gupta and Rishita Sachdeva.
LinkedIn experts and real-life stories offer hope that Indian tech talent can still thrive globally, even as the $100,000 H1B fee reshapes onsite opportunities.
These are 'hidden champions' of strategic research and innovation. They are worthy of emulation within Indian industry, and maybe even a Padma!, notes R Gopalakrishnan.
'The choice is clear: We either embrace this transformation and cement our global leadership, or hesitate, lose ground, and fade into irrelevance.'
'It is the responsibility of industry to take the very bright talent whose knowledge of software engineering basics is very high, and then give them additional skills.'
Words like business process outsourcing (BPO) and offshoring may not exist in the IT dictionary by 2015. Substitutes like business service outsourcing and global delivery model (GDM), necessitated by the changing business model of IT firms, are likely to replace them over the next seven years.
'The race is now on for Indian IT firms to develop their AI prowess and focus on a software-first approach to services as the people element becomes more complicated with Trump's expected new regulations.'
Certain changes in the past two or three years could have a long-term structural impact on the IT services market.
American chip behemoth Nvidia Corp and India's retail-to-refining giant Reliance Industries on Thursday unveiled their goal to build a formidable AI computing infrastructure in the country. Highlighting the tie-up, Jensen Huang, founder and CEO of Nvidia, made a broader appeal: India should focus on "manufacturing" AI, rather than racing to build semiconductor fabs. As part of this collaboration, Nvidia will reportedly supply its Blackwell AI processors to power Reliance's one-gigawatt data center in Jamnagar, Gujarat.
'The list of things to be done or added or removed will keep growing and it will be a while before the emerging models settle down into lasting structures,' predicts Umesh Shrikhande, CEO, Taproot Dentsu.
Keshav Murugesh, CEO of the Nasdaq-listed WNS, discusses the impact of the Trump administration on BPO and BPM industry with Ayan Pramanik.
After going through a series of mergers and acquisitions, Mindteck, a Bangalore-headquartered IT services company, is looking to consolidate its various businesses which will see more work being moved offshore, to locations in India.
To cement India's position as a preferred global outsourcing destination, the government on Wednesday liberalised guidelines for voice-based BPOs removing the distinction between domestic and international units as well as permitting interconnectivity between all types of OSP centres. Broadly, the rules would allow global companies, say an airline, with a voice-based centre in India to now serve global and domestic customers with common telecom resources, something that required dedicated, separate infrastructure previously. Moreover, the restrictions on data interconnectivity between any BPO (business process outsourcing) centre of the same company, a group company or any unrelated company has been done away with, allowing for massive flexibility in resource management for BPO operations.
Experts said this would not only reduce Infosys' dependence on the H1B visa, which has seen increased restrictions under the current US administration. It will also help the company in building an employee pyramid for its future operations.
The analyst community tracking the Indian IT services industry took special note of Accenture's first quarter (Q1) performance, which showcased the rapid growth of its consulting business that outperformed its outsourcing business. Bookings indicate that the trend will continue. Consulting bookings increased 41.6 per cent year-on-year (yoy) to $9.4 billion, higher than the 17.6 per cent growth in outsourcing to $7.4 billion. The management commentary was also more bullish on the consulting business.
Experts believe modifying the placement model is a good decision given the changes that campus recruitment has undergone globally, says Vinay Umarji.
TCS is tapping an emerging opportunity called IT modernisation, which potentially could be a growth driver for the entire IT services industry for the next two to three years, says Raghu Krishnan.
In January, Visa's chief executive officer, Al Kelly, said during an earnings call that "there's been a burst of the balloon in valuations in the fintech world". Noting that the trend of lower valuations "is a helpful characteristic of the current environment", he added: "We will look for capabilities and management teams that will bring more value to Visa than we can bring ourselves." Data from KPMG's Pulse of Fintech H2'22 shows that global fintech investment - via mergers and acquisitions (M&As), private equity (PE) and venture capital (VC) firms - at $164.1 billion in 2022, was down 31 per cent over the year before. Indian fintechs held up better during this timeframe, attracting $6 billion, or a fall of 24 per cent.
Of the 2,562 customer complaints received between January 2020 and March 2021, a majority relate to illegal apps. At least two dozen suicide cases have been reported, perpetrated by the harassment by loan app operators, points out Tamal Bandyopadhyay.
Krithi Krithivasan is the kind of person one might look to when the need is to calm things down and put things back on track.
'Generic skills are in abundance, but technological advancements have left staple skills redundant.' 'It is why employers are now looking for alternate sources of hiring -- deploying gig workers, looking at Tier 2 and Tier 3 cities for relevant talent.'
The lockdown that crippled the entire logistics, delivery and supply chain network to near zero, was enough to deal a body blow to India's fastest growing unicorn whose very business model saw a severe disruption, like several other firms and sectors.
'We will see a lot of investments from the private sector.' 'As long as we are not impacted by some global events, I think we will be in a strong place.'
Leading software outsourcing firm Cognizant Technology on Tuesday reported a 15.4 per cent rise in net profit at $319.6 million in the quarter to September driven by a strong ramp up in demand for outsourcing services, up from $276.9 million a year ago.
But Indian information technology workers might do better without the companies that held them back, says Mihir S Sharma.
80% of incremental enterprise investment to be in digital technologies by 2020.
IT majr Wipro needs stability at the top deck, say industry watchers.
Many companies are putting HR's reputation as a back office administrator to rest by either outsourcing or automating most administrative tasks.
The IT major is donning a new face for the changing times, says Ayan Pramanik.
The IT major is donning a new face for the changing times, says Ayan Pramanik.
Despite higher gross additions, growth in overall customer base has been tepid for these companies, says Debasis Mohapatra.
Of the 3.9 million the sector employs, HR experts say at least 100,000 are likely to lose their jobs by the end of this financial year. Ayan Pramanik and Raghu Krishnan report.
The promoter-brothers, distant cousins to IndiGo's Rahul Bhatia, are eyeing Air India's ground handling subsidiary to augment their aviation services business even as they make a big play in EVs.
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