AI to disrupt traditional IT services model; Indian firms must reinvent or risk decline: Kearney

India’s $250-billion IT services industry is at a turning point as artificial intelligence reshapes workforce structures and consulting models, according to global consulting firm Kearney. Siddharth Jain, Country Head and Managing Partner at Kearney India, warned that companies failing to innovate beyond traditional outsourcing—such as full-time employee or rate-card-based models—risk decline as demand shifts toward AI-led transformation services. Kearney predicts mid-sized firms may outpace larger incumbents in adapting to AI disruption, potentially leading to market-share consolidation without mergers. Cross-border acquisitions by Indian firms are expected to rise as they seek global consulting capabilities and stronger international client access. Bob Willen, Chairman and Managing Partner at Kearney, noted that AI adoption is accelerating globally, with businesses still figuring out how to scale experiments into sustainable models. While layoffs and restructuring loom, Kearney continues hiring, prioritizing employees with data, technology, and AI expertise. Jain remains optimistic about the sector’s medium-term outlook if companies successfully adapt, despite concerns over job displacement. The industry must transition from legacy models to consultative, transformation-driven approaches to remain relevant amid rising automation and client demands for AI-driven productivity gains.