Analysts believe Tata Consultancy Services' move to return to its vertical-based operating structure will help it deal with the bigger macroeconomic problems that the country's information technology sector is facing.

They added that while Mumbai-based TCS's move to separate its largest vertical, BFSI (banking, financial services, and insurance), into two is welcome, the present climate necessitates more geography-specific specialization than the country's largest IT business currently provides.

“For TCS, its recent change in structure has caused a lot of internal politics and issues with access to scarce resources. So going back more to what they are familiar with should help calm the waters as they target more client wins and expansions,” said Phil Fersht, chief executive of IT research firm HfS Research.

During former CEO Rajesh Gopinathan's tenure, K Krithivasan oversaw the BFSI vertical and kept it out of TCS' 2022 operational overhaul, which divided the business into four sections based on account size.

Last week, Krithivasan revealed a new operational structure that integrates the $28 billion corporation according to its business sectors, as well as other leadership changes.

According to analysts, the people who were leading client-specific groups are now leading the top new verticals, such as Susheel Vasudevan, who managed the incubation group with a focus on clients with less than $20 million; Krishnan Ramanujam, who led the enterprise group for clients with $20-100 million; and Debashis Ghosh, who led the business transformation group for clients with $100 million or more.

According to analysts, the 2022 structure was designed to incentivize executives to increase the scale of individual customer interactions, and those success indicators will remain relevant despite the altered corporate structure.

TCS' BFSI vertical has been divided into two sections to accommodate its size. Susheel Vasudevan leads the North America business, while Shankar Narayanan leads the other territories.

Over the last two quarters, IT heavyweights such as TCS have reported that the slowdown and uncertainty in the demand environment has begun to affect BFSI deals as well. According to outsourcing specialist Pareekh Jain, the BFSI split will allow TCS to focus on significant agreements in certain geographies, as a huge number of geography-specific difficulties drive customer demand.

TCS' BFSI vertical generated more than Rs 86,000 crore in sales in FY23, accounting for around 31 percent of the company's total revenue.