New Delhi: Last week, American bleach manufacturer Clorox sued Cognizant over a 2023 cyberattack, demanding $380 million in damages. Earlier this year, the Tata Consultancy Services (TCS) was “blamed for a massive data breach” that “wreaked havoc” at Marks and Spencers.
“Is this an Annus Horribilis for the IT services sector? It’s certainly starting to look that way,” writes Veena Venugopal in the Financial Times’ India Business Briefing.
“Indian IT companies have been experiencing sluggish growth and their stocks have been underperformers in the market for several quarters now. The advancement in AI capabilities in the past year as well as the uncertainties unleashed by the new Trump administration in global trade have hit these companies hard,” says the newsletter.
After it was supposedly rescued by the Tatas in 2021, Air India’s “long-term ambitions” are now in flux. The Ahmedabad-London crash has raised critical questions about “its ability to operate safely,” reports Hannah Ellis Peterson in The Guardian.
“In the weeks after the crash, Air India has faced growing scrutiny after attention has turned to its own recent alleged chequered safety record. Last week, the Indian government began holding direct meetings with senior Air India management, calling for better oversight on safety and engineering,” the report says.
After years of “languishing” under State-ownership, Tata agreed to buy it back from the government, “pledging to restore it to its former glory”, The Guardian also notes.
Kartik Kumra’s clothes have been worn by rapper Kendrick Lamar, NBA basket ball player Stephen Curry, actor Brad Pitt and actor-rapper Riz Ahmed. He showed at this year’s Paris Fashion Week. His brand, Kartik Research, has the “ability to reframe Indian crafts in the context of Western fashion”—and is now stocked in 70 locations across the world, including at Selfridges, reports Alisha Haridasani Gupta in The New York Times. Kumra’s success is part of a global pull towards Indian fashion and textiles.
“Next season, India is not going to be the reference for them,” Kumra has been quoted as saying, referring to companies like Prada and Louis Vuitton. “But this is our thing. We built a business on it and we’re going to keep doing it.”
“Each garment had made its way through an ‘independent universe of small makers’,” Kumra said. “The real experts—the master embroiderers, weavers, printers.”
“Their work isn’t scalable, nor can you find their phone numbers online. To work with them requires building on-the-ground relationships,” the report reads.
For the first time ever, India has overtaken China to emerge as “the top source of smartphones sold in the US,”, reports Vlad Savov in Bloomberg.
In the quarter through June, India was the largest manufacturer of smartphones shipped to the US for the first time, accounting for 44 percent of the market, according to Canalys data. Vietnam, home to much of Samsung Electronics Co.’s production, came in second. China fell from having more than 60 percent of all estimated shipments a year ago to just 25 percent.
Tata Consultancy Services (TCS) has announced that it’s culling two per cent of its workforce—amounting to about 12,000 jobs at middle and senior management levels. Other than sending shockwaves, it sparked a “moment of reckoning” for India’s “showpiece software industry,” reports Nikhil Inamdar in the BBC.
“Besides the structural shifts brought about by the advent of AI, TCS’s announcement also ‘reflects the broader growth challenges being faced by India’s IT sector’, according to global investment banking firm Jeffries,” the report says.
The impact of AI and the challenges plaguing the IT sector goes beyond just TCS.
“The ripple effects of this have begun to be felt in cities like Bengaluru, Hyderabad and Pune – once the epicentres of India’s IT boom. Some 50,000 people in the industry lost their jobs last year, according to one estimate. And there was a 72% drop in net employee additions at India’s top six IT services companies,” the report also says.
(Edited by Ajeet Tiwari)
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