TCS Salary Freeze Shocks Workforce: HR Chief Blames “Macroeconomic Uncertainty” Despite Q1 Surge

Profits Rise, But Pay Stalls: TCS’s Q1 Paradox

TCS Salary – Tata Consultancy Services (TCS) reported a 6% year-on-year rise in net profit, reaching ₹12,760 crore for the quarter ending June 30, 2025. Revenue stood at ₹63,437 crore, up 1.13% from the previous year. Despite these gains, the company has not announced salary hikes for its 6.13 lakh employees.

Chief Human Resources Officer Milind Lakkad addressed the issue during the Q1 earnings press conference, stating:

“We have not made any decisions so far. Wage hikes can happen anytime during the year, depending on business conditions.”

This ambiguity has left employees and analysts puzzled. Traditionally, TCS rolls out increments by April 1, but this year’s delay is attributed to macroeconomic headwinds, geopolitical tensions, and client-side investment hesitations.

The company’s CEO, K Krithivasan, echoed this sentiment, citing “delays in decision-making in discretionary projects” and “global disruptions” as key factors impacting business confidence.

Attrition Climbs, Hiring Continues: Mixed Signals from HR

While salary hikes remain undecided, TCS has continued to expand its workforce, adding 5,090 net employees in Q1 FY26. The total headcount now stands at 613,069, making it one of the largest tech employers globally.

However, the attrition rate rose to 13.8%, up from 13.3% in the previous quarter. Lakkad admitted this was “above our comfort level” and assured that efforts were underway to bring it down.

This dual narrative growth in headcount alongside rising attrition, suggests a complex internal dynamic. Employees are reportedly anxious about the lack of clarity on compensation, especially as competitors like Infosys and Wipro have already announced modest hikes.

Industry insiders speculate that TCS may roll out lower-than-usual increments, ranging between 4% and 8%, marking the lowest hike in four years. In comparison, the company offered 10.5% in FY22, 6-9% in FY23, and 7-9% in FY24.

What This Means for India’s IT Sector and TCS’s Future

TCS’s cautious stance reflects broader trends in India’s IT industry. With global clients tightening budgets and delaying discretionary spending, firms are prioritizing cost control over aggressive compensation strategies.

Yet, this approach risks talent drain, especially in high-demand areas like AI, cloud computing, and cybersecurity. TCS claims that 114,000 employees now possess advanced AI skills, but retaining them without competitive pay could prove challenging.

The Indian IT sector, valued at $245 billion in FY23, is projected to reach $380 billion by 2026, creating 14 million jobs. TCS’s decisions will likely influence hiring and retention strategies across the industry.

For now, employees await clarity. The company’s silence on timelines has sparked internal discussions, with many hoping for announcements before the festive season. Whether TCS chooses to reward loyalty or continue its cautious path will shape its reputation in the months ahead.

Conclusion:
TCS’s Q1 results may have impressed investors, but its indecision on salary hikes has stirred unease among employees. As attrition rises and competitors move ahead, the IT giant faces a critical choice: prioritize fiscal caution or invest in its people. The answer could define its future.

Stay updated with the latest news on Rapido Updates. Keep yourself updated with The World, India News, Entertainment, Market, Automobile, Gadgets, Sports, and many more