TCS puts April salary hikes on hold, cites economic uncertainty, tariff concerns

Tata Consultancy Services (TCS) has deferred its annual wage hikes, which were scheduled to begin in April, citing ongoing macroeconomic uncertainty and concerns around the evolving US tariff landscape.

Company executives, speaking at a press conference on Thursday, said the hikes would be rolled out later in the financial year, once the environment stabilizes and the company gains clearer visibility.

“We will decide during the year when to make the wage hike,” said Milind Lakkad, the outgoing chief human resources officer (CHRO).

This move echoes a similar step taken by TCS five years ago at the onset of the COVID-19 pandemic, when global business was severely disrupted. It also underlines the current caution within the information technology sector, where firms are closely managing costs amid client uncertainties.

K Krithivasan, chief executive officer, noted that the company has already begun seeing signs of strain in client spending habits.

“There will be delays in discretionary spending if this continues,” he said, highlighting project delays and slower ramp-ups as clients reassess their budgets in light of pending tariffs.

While annual salary increases are on hold for now, TCS will proceed with quarterly variable payouts. For the fourth quarter, 70% of employees will receive 100% of their eligible variable pay, while the remainder will receive variable compensation based on business performance.

Despite the wage hike deferral, TCS plans to maintain its campus hiring momentum. The company will hire around 42,000 engineers from engineering colleges this year, consistent with its previous year's commitment. In the fourth quarter ended March 31, the company added 625 employees, bringing its total headcount to 607,979. For the full financial year, it saw a net addition of 6,433 employees, reversing a decline of 13,249 in the previous year.

Attrition inched up to 13.3% in the fourth quarter, compared to 13% in the previous quarter. Lakkad confirmed that TCS successfully onboarded 42,000 freshers over the course of FY25 as planned.

Q4 and full-year results

TCS reported a net profit of Rs 12,224 crore for the fourth quarter of FY25, a 1.7% decline from ₹12,434 crore in the same quarter of FY24. Revenue for the quarter grew 5.3% year-on-year to Rs 64,479 crore, and was up 0.79% sequentially.

For the full financial year, the company reported a net profit of ₹48,553 crore, an increase of 5.8%, while annual revenue reached ₹255,342 crore, up 6% year-on-year. With this, TCS crossed the $30 billion revenue mark.

The order book total contract value (TCV) stood at $12.2 billion in Q4FY25, compared to $10.2 billion in the previous quarter. TCVs for the first two quarters of the year were $8.3 billion and $8.6 billion, respectively.