The IT services business is at the cusp of a significant inflection point, says C Vijayakumar, MD and CEO of HCLTech, According to him, the time has come to disrupt the highly successful model that has been in place for years.

In an interview with CNBC-TV18 at the World Economic Forum (WEF) in Davos, Vijayakumar said, “The world and technology are changing rapidly, rendering existing operating models obsolete.”

Vijayakumar noted that traditional linear growth in people and revenue is giving way to a decoupling of headcount and revenue growth, driven by successful AI adoption.

According to Vijayakumar, companies should aim to achieve 5-10% growth without relying on headcount increases.

Although costs and wage bills may increase, headcount growth cannot continue on a linear trajectory. He emphasised that generative AI’s primary benefit lies in its ability to significantly enhance efficiency across software development, operations, and product development, ultimately transforming business models.

“We are constantly exploring ways to unlock more value, as each program frees up human capital,” Vijayakumar explained. “Our goal is to leverage this freed-up human capital to drive business growth, which is the core of our journey.”

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Vijayakumar expressed optimism about the market sentiment, citing renewed confidence in the US. “Over the last two quarters, we have seen discretionary spending pick up. Financial services have shown a good pickup in the last two quarters, and even technology and other verticals saw some good pickup last quarter. I am really hoping this momentum will continue, and given all the conversations I have had, I feel more confident.”

Regarding artificial intelligence (AI), HCLTech has a platform called AI Force, which leverages language models and is being proactively implemented. The platform has already delivered success for six clients and aims to scale to 100 by the financial year 2026.

HCL Technologies recently marked its 25th anniversary with an impressive track record. Vijayakumar said, “We have delivered industry-leading TSR, with a 20.6% CAGR TSR over 25 years, even beating Warren Buffett’s record. We couldn’t be in a better place, and we are very happy about that.”

For full interview, watch accompanying video

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