Tata Consultancy Services, the biggest IT company in India, established a new division for AI-based operations and appointed insider Amit Kapur as its head.

To accelerate innovation and strengthen the company's focus on AI domain solutions, the new AI and services transformation unit will house all of the company's current technological capabilities.

A month after the industry watchdog, TCS, disclosed intentions to lay off 12,000 workers, escalating warnings that India's $283 billion outsourcing industry may experience additional layoffs as AI usage grows.

In an effort to boost customer spending, which has been slowed for several quarters by global macroeconomic uncertainty, Indian IT companies are rushing to implement and provide more AI solutions.

After twenty years with the company, Kapur assumes leadership of the unit in September. He most recently oversaw TCS's operations in the UK and Ireland.

The U.S. rival Accenture made a similar step in June, and TCS is the first Indian IT company to focus exclusively on AI and related technologies.

"IT firms have started to think that AI-led transformation is their only major lever now to accelerate growth amid tepid macros," said Pareekh Jain, founder of IT research firm EIIR Trend.

"The change is also a reflection of extracting more AI-focussed projects from clients."

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Peter Bendor-Samuel, founder and executive chairman of Everest Group, described the changes as very encouraging, particularly as AI is disrupting the tech services industry.

He added that TCS was now taking concrete steps to ensure it is not left behind in this disruption and will use AI aggressively across its businesses. “The appointment of Amit Kapur, a senior and well respected executive underscores the seriousness that TCS is viewing the AI challenge,” he said.