TCS Freezes April Pay Hikes Due to Economic Concerns

Citing continued financial uncertainty and worries about the changing US tariff landscape, Tata Consultancy Services (TCS) has postponed its yearly wage increases, which were supposed to start in April. Speaking at a news conference on April 10, corporate leaders stated that the hikes would be implemented later in the fiscal year. That will be done after the situation has stabilised and the company's visibility has improved. According to departing chief human resources officer (CHRO) Milind Lakkad, the business will determine when to raise wages during the year.

TCS made a similar move five years ago during the start of the COVID-19 epidemic, when international business was significantly interrupted. It also highlights the current prudence in the IT industry, where businesses are strictly controlling expenses in the face of uncertain clients. The company has already started to notice strain in customer spending patterns, according to CEO K. Krithivasan. He also warned that if this keeps up, there may be delays in discretionary expenditure. Project delays and slower ramp-ups as clients reevaluate their budgets in light of imminent tariffs are the reasons for this hold, he said.

Keeping the Hiring Momentum On

TCS intends to keep up its campus hiring pace in spite of the salary raise deferment. In keeping with its pledge from the previous year, the corporation plans to hire some 42,000 engineers from engineering colleges this year. With the addition of 625 workers in the fourth quarter, which concluded on March 31, the corporation now employs 607,979. It recorded a net increase of 6,433 workers for the entire fiscal year, which reversed a 13,249 decrease the year before. In the fourth quarter, attrition increased little to 13.3% from 13% in the prior quarter.

According to Lakkad, TCS successfully onboarded 42,000 new hires during FY25 as scheduled. TCS will continue with quarterly variable rewards while putting a temporary halt to annual compensation increases. While the remaining employees will earn variable compensation depending on business performance, 70% of employees will receive 100% of their eligible variable pay for the fourth quarter.

TCS’ Financial Outlook

For the fourth quarter of FY25, TCS recorded a net profit of INR 12,224 crore, a 1.7% decrease from INR 12,434 crore in the same quarter of FY24. The quarter's revenue increased 0.79% sequentially and 5.3% year over year to INR 64,479 crore. While the company's yearly revenue hit INR 255,342 crore, up 6% year over year, it posted a net profit of INR 48,553 crore for the full fiscal year, a 5.8% gain. TCS's revenue surpassed $30 billion with this. In Q4 Q4FY25, the order book total contract value (TCV) was $12.2 billion, up from $10.2 billion the quarter before. TCVs were $8.3 billion and $8.6 billion for the first two quarters of the year, respectively.