TCS hits pause on salary hikes amid global uncertainty—but still plans 42,000 campus hires

India’s IT bellwether, Tata Consultancy Services (TCS), has decided to postpone employee salary increments—originally slated for April—as global economic headwinds, including escalating trade tensions, force a cautious approach.

The company confirmed the delay during its quarterly earnings briefing but assured that hikes would be rolled out later in the fiscal year once market conditions stabilize.

A Prudent Pause

Milind Lakkad, Chief HR Officer at TCS, stated, “We will decide during the year when to implement the wage hike.” The move mirrors the company’s stance during the pandemic-induced uncertainty of 2020, reflecting a broader trend of fiscal restraint in the IT sector. With Infosys and Wipro set to announce their quarterly results soon, industry watchers anticipate similar deferrals across the board.

Despite the hold on fixed pay revisions, TCS will continue quarterly variable payouts. In Q4, 70% of employees received full variable pay, while the remaining 30% saw adjustments based on business unit performance.

Clients Hit Pause on Spending

CEO K Krithivasan noted that discretionary spending among clients has slowed, with project ramp-ups facing delays due to geopolitical and trade uncertainties. “If this trend persists, we could see further deferrals in IT budgets,” he cautioned. The ongoing US tariff war and global economic volatility have left businesses in a wait-and-watch mode, directly impacting IT service providers.

Hiring and Attrition Trends

On the hiring front, TCS plans to onboard around 42,000 fresh engineering graduates in FY26, maintaining last year’s levels. The company’s workforce grew by 6,433 employees in FY25, a rebound from the previous year’s decline of 13,249. However, attrition inched up to 13.3% in Q4, signaling persistent talent retention challenges in a competitive market.

Leadership Reshuffle

In a strategic overhaul, TCS announced two key appointments:

Aarthi Subramanian, former Chief Digital Officer at Tata Sons, will take over as Chief Operating Officer (COO) from May 1.

Mangesh Sathe, ex-CEO of Tata Strategic Management Group, joins as Chief Strategy Officer, overseeing global consulting and M&A.

Krithivasan emphasized that these moves are part of a broader effort to “expand leadership in emerging tech domains where organic talent alone isn’t enough.”

The Road Ahead

While TCS remains optimistic about long-term growth, the salary hike deferral underscores the near-term challenges facing the IT sector. With macroeconomic pressures showing no immediate signs of easing, employees may need to brace for a prolonged period of fiscal prudence—at least until global markets regain stability.

For now, all eyes are on Infosys and Wipro’s upcoming earnings reports, which could reveal whether TCS’s cautious approach is an outlier or the new industry norm.