No salary hike for TCS employees this year...

Tata Consultancy Services (TCS), India's largest IT services company, has announced a delay in the planned salary hikes for 2025. This decision was revealed during a press meet in Mumbai on April 10, 2023, after the release of their fourth-quarter earnings report.

The Chief Human Resources Officer, Milind Lakkad, stated, “Because of the uncertain environment, we will decide during the year on wage hikes. It can be at any time, depending on business.”

Economic Slowdown in IT Sector

This development comes amidst broader concerns in the Indian IT sector, which is grappling with slowdowns in key markets such as North America. Client decision delays and cost-cutting measures have prompted caution across the industry.

For the quarter ending March 2025, TCS reported a 5.3% growth in consolidated revenue, reaching Rs 64,479 crore. However, their net profit declined by 1.69% to Rs 12,224 crore, falling short of market predictions.

Workforce Expansion Continues

Despite these cautious financial strategies, TCS continues to grow its workforce. In the 2025 financial year, the company added 6,433 employees, taking their total workforce to 607,979. Additionally, 625 employees joined in the fourth quarter alone. 

Lakkad confirmed that the target of inducting 42,000 trainees for FY25 was met, and fresher recruitment is expected to remain steady or potentially increase in the next fiscal year.

Attrition Rates and Competitive Positioning

When questioned about the potential pay increase size, Lakkad refrained from specifying details, emphasising that decisions would depend on the changing business environment.

TCS reported an attrition rate of 13.3% for Q4 FY25, an increase from the previous quarter's 13%. Nevertheless, Lakkad expressed confidence in managing employee turnover: “Although TTM (trailing twelve months) attrition has marginally increased, our quarterly annualised attrition rate has come down by 130 basis points.”

While TCS employees await salary decisions, the company's ongoing recruitment efforts and enhanced attrition management highlight its commitment to maintaining competitive standing despite global economic uncertainties.