Hexaware CEO Warns AI May Cut IT Project Prices 25%

Chief Executive Officer of Hexaware Technologies Ltd. Srikrishna Ramakarthikeyan warns that artificial intelligence could reduce the price of routine IT projects by up to 25%. He describes AI as "deflationary" for certain services because the technology reduces the number of personnel required to complete specific tasks, which may lead to a decrease in entry-level engineering hires.

To offset the decline in billable hours caused by these efficiency gains, Hexaware is shifting its business model toward fixed-price and platform-based contracts. The company is also focusing on AI-native products and new revenue sources. Currently, more than half of Hexaware's revenue is AI infused, a proportion Ramakarthikeyan expects to reach 80% within three years.

This shift occurs amid a broader industry downturn. Hexaware and major competitors, including Infosys Ltd., Wipro Ltd., and Tata Consultancy Services Ltd., have experienced significant share price declines since early last year.