TCS Defers Salary Hikes for FY26 Amid Global Uncertainty: What It Means for Employees and Markets

TCS Defers Salary Hikes for FY26 Amid Global Uncertainty: What It Means for Employees and Markets

In a significant development for India’s IT sector, Tata Consultancy Services (TCS), the country’s largest IT services firm, has decided to defer its annual salary hikes, originally scheduled for April 2025. The decision comes amid mounting global economic uncertainty and tariff-related concerns, prompting the company to take a cautious approach.

Salary Hikes on Hold: TCS Employees Face Delayed Increments

TCS, which employs over 6.07 lakh people globally, has cited an unpredictable business environment as the reason behind postponing the wage revision cycle.

“Because of the uncertain environment, we will decide during the year on wage hikes. It can be at anytime, depending on business,” said Milind Lakkad, Chief Human Resources Officer at TCS, during a recent earnings call.

This move affects employees across roles and levels, as TCS typically announces annual compensation revisions in April. The company has not set a specific date for when hikes may be reconsidered.

TCS Market Cap Declines by Over ₹24,000 Crore

The deferment of salary hikes coincides with a notable market cap loss for TCS. In the holiday-shortened trading week from April 7 to April 11, 2025, the IT giant’s valuation fell by ₹24,295 crore, bringing it down to ₹11.69 lakh crore.

This dip was triggered by a 3.82% fall in TCS stock, which closed at ₹3,238 on Friday, April 11. The Indian stock markets were shut on Thursday due to Mahavir Jayanti, but the Sensex and Nifty both registered minor losses during the week — 0.27% and 0.33%, respectively.

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Q4 Performance: Mixed Bag for TCS

TCS reported a 1.68% year-on-year dip in its consolidated net profit for the March quarter (Q4 FY25), landing at ₹12,224 crore. This decline was largely attributed to margin pressures. However, total revenue for the quarter stood at ₹64,479 crore, reflecting a 5.3% growth over the same period last year.

For the full financial year FY25, TCS recorded:

• Net profit: ₹48,553 crore (up 5.76% YoY)

• Revenue: ₹2,55,324 crore (up 5.99% YoY)

Despite the global headwinds, the full-year results show that the company maintained steady growth, albeit at a slower pace compared to previous years.

US Tariff Concerns Add to Business Volatility

TCS CEO and MD K Krithivasan addressed growing concerns over US tariff policies, which have been fluctuating over the past few months and impacting global tech outsourcing dynamics.

“This tariff-related uncertainty is expected to be short-lived. We anticipate clarity and resolution within a few months,” Krithivasan noted.

The uncertain trade environment has been a dampener on sentiment across the global IT services sector, with companies like TCS exercising caution on both compensation and expansion decisions.

Fresher Hiring to Remain Strong in FY26

Despite the deferred wage hikes, TCS is optimistic about talent acquisition, especially at the entry level. The company hired over 42,000 freshers from campuses in FY25 and has indicated that fresher hiring will be maintained or increased in FY26.

This suggests that while salary revisions may be paused temporarily, the company remains committed to nurturing new talent and investing in its long-term workforce pipeline.

What This Means for the IT Sector

TCS’ decision to hold off on salary increments may set the tone for other large IT firms navigating the same global challenges. While growth is continuing, it is clear that companies are operating with caution amid geopolitical instability, shifting client budgets, and macroeconomic uncertainties.

For employees, this underscores the importance of adaptability and continued upskilling, as compensation cycles may become increasingly performance- and environment-driven.

Final Thoughts

The deferment of salary hikes at TCS reflects a pragmatic response to global volatility, particularly concerning international trade policies and slowing tech spending. However, the company’s continued focus on hiring and its optimistic outlook for FY26 indicate confidence in long-term recovery and growth.

As the situation evolves, TCS employees and investors alike will be watching closely for signs of stabilization—and the return of long-awaited wage hikes.