Microsoft Deploys Copilot to 300,000 Consultants at TCS, Infosys and Wipro While Capgemini Cuts 2,400 Jobs in France

Microsoft announced on 3 June that TCS, Infosys and Wipro together surpassed 330,000 active licences of Microsoft 365 Copilot, the largest corporate rollout ever conducted by a generative AI provider. At the list price of E5 with the Copilot add-on at $30 per user per month, this represents an annual commitment of around $120 million flowing from Bangalore, Mumbai and Pune to Redmond. In the same quarter, Capgemini announced a collective plan to cut up to 2,400 positions in France. The two movements tell the same story from opposite ends of the pyramid.

The distribution of licences is not uniform. Infosys reached 115,000 posts, with 91% monthly active usage, according to the company itself. TCS reached 110,000, with 86% usage. Wipro rounds out the trio with 105,000. The harsh reading of these numbers, made by Phil Fersht of HFS Research to clients in May, is straightforward: "Paying for Copilot does not convert into new revenue. It becomes compressed margin if the client expects productivity gains reflected in the invoice price".

The Divergence between IND and CONT

TCS cut 23,460 employees in FY26 while migrating to an "AI-first" model, according to its own quarterly reports. Infosys reduced its headcount in Q4 FY26 but maintained its goal of hiring 20,000 juniors for the year, with 18,000 already on board. In absolute terms, the five largest Indian firms, TCS, Infosys, Wipro, HCLTech and Tech Mahindra, collectively cut 6,981 positions in FY26, reversing two consecutive years of net growth. The Indian IT industry as a whole grew by 140,000 posts to 5.9 million, according to Nasscom, as captive GCCs of Walmart, JPMorgan and Goldman Sachs absorbed what outsourced services failed to employ.

Capgemini is playing a different game. The Spanish ERE announced in April explicitly cites AI as the reason for the reduction in a base of 11,000 employees in the country. The French operation concentrates the 2,400 cuts in "data engineering, cloud and AI" as redirecting offers, according to a letter from Aiman Ezzat to the social committees. For Sumit Sood, head of advisory at Pierre Audoin Consultants, the problem facing the French company is structural: "Capgemini pays European salaries for the middle of the pyramid that AI is replacing, and European clients are unwilling to migrate this to Mumbai without reducing the take rate".

The Case for AI is More Subtle Than It Seems

The reading that AI is merely a headcount reducer is the loudest, but it is not the only one defended. Anand Eswaran, CEO of Veeam and former Microsoft, argued at a panel at the NASSCOM Technology and Leadership Forum in February that the use of Copilot in contracted delivery becomes currency in negotiating the next contract. "The client who sees a 30% time gain per consultant with Copilot wants to renew the base under the same budget and expand the scope. Those delivering service without this are the ones losing out". This reading aligns with Infosys's guidance for FY27 of a 1.5% to 3.5% growth in constant currency, conservative yet stable, and an operational margin of 20% to 22%.

The data that weakens the thesis of "AI cannibalising white-collar work" in the Indian case is the net increase of 140,000 positions in the industry. This is not the same as stating that spending is growing: captive GCCs pay salary grades 25% higher than traditional outsourcing, according to a survey by Quess Corp from March. The employer is changing, not the country. For the worker in Bangalore, the queue at TCS may be shorter, but Walmart's GCC queue is longer.

The Reading Outside India and France

In Brazil, CI&T and Stefanini operate the same Indian service model on a smaller scale, and Wipro and TCS maintain significant centres in Curitiba and Sorocaba. The local reading matters for two reasons. Firstly, federal contracts and those of major Brazilian banks involving technology transfer clauses now have a de facto reference to include Copilot productivity in negotiations. Secondly, the bottleneck of the CLT, with charges nearing 80%, makes the automation of low-value tasks a path to immediate margin improvement rather than replacement by junior hiring.

In the United States, Accenture has already navigated this same trade-off with a cut of 11,000 employees in July 2025 and a revenue growth of 8% in FY26, according to its March earnings. The contrast with Capgemini is not favourable for the French company, but it does not resolve the investor's question: the multiple of Indian IT services, currently at 24x earnings for Infosys and 27x for TCS, embeds growth that the company's own guidance does not confirm. If AI generates downward contract negotiations, as Fersht argues, the multiple will decline before headcount.