Tata Consultancy Services (TCS), India’s largest IT services firm by revenue, has decided to defer salary hikes for employees starting April, citing heightened macroeconomic uncertainty driven by the ongoing tariff war between the US and other nations.

The company said hikes would be considered later in the financial year, depending on improved visibility and market conditions. “We will decide during the year when to make the wage hike,” said Milind Lakkad, Chief Human Resources Officer, during a press briefing on Thursday.

The move mirrors steps taken by TCS during the early days of the pandemic five years ago and signals a broader sense of caution across the IT sector. Industry peers Infosys and Wipro, both set to announce their Q4 results next week, may follow suit.

TCS Maintains Variable Payouts

Despite putting salary hikes on hold, Tata Consultancy Services (TCS) will proceed with quarterly variable payouts. For the fourth quarter, 70 per cent of employees will receive their full variable pay, while payouts for the remaining staff will be performance-based, the company said.

Discretionary spending remains tight, with TCS reporting delays in project ramp-ups and client spending over the past month, as businesses await clarity on evolving tariff policies.

“There will be delays in discretionary spending if this continues,” said CEO and Managing Director K Krithivasan.

Looking ahead, the company plans to hire around 42,000 engineering graduates from campuses in FY26 — in line with hiring levels from FY25. In the March quarter, TCS added 625 employees, bringing its net headcount increase for the year to 6,433, marking a recovery from last year’s decline of 13,249.

TCS Attrition Rises Slightly

Tata Consultancy Services (TCS) reported a marginal uptick in attrition, which rose to 13.3 per cent in Q4FY25 from 13 per cent in the previous quarter. As of March-end, the company had a workforce of 607,979 employees.

Leadership Changes

TCS has announced two major leadership appointments as part of its broader strategic push. Nearly a year after the retirement of N G Subramaniam, the company has appointed Aarthi Subramanian as Chief Operating Officer (COO), Executive Director, and President for a five-year term starting May 1. Subramanian previously served as Chief Digital Officer at Tata Sons, where she led digital, technology, and innovation initiatives across the conglomerate.

In a parallel move, Mangesh Sathe has been named Chief Strategy Officer. Formerly CEO of Tata Strategic Management Group at Tata Sons, Sathe will head TCS’s global consulting practice and oversee mergers and acquisitions. Both executives will report directly to CEO and MD K Krithivasan.

This is part of our broader strategic exercise. As we see major shifts in technology, there are several areas where we need to build talent and partnerships. In some of these, we can’t rely solely on homegrown talent. To expand and maintain leadership in these areas, we wanted to increase our bandwidth,” Krithivasan said.