Tata Consultancy Services (TCS) has decided to defer employee salary hikes for 2025, citing a volatile business environment. The announcement was made during the company’s post-Q4 earnings press conference in Mumbai on April 10.
“Because of the uncertain environment, we will decide during the year on wage hikes. It can be at any time, depending on business,” said Chief Human Resources Officer Milind Lakkad. While not ruling out salary increases entirely, Lakkad clarified that the timing and scale of the hikes will be evaluated as the financial year progresses.
The decision reflects growing caution in the Indian IT sector as companies grapple with slowdowns in major markets, especially North America, which continues to see delayed client decision-making and cost-cutting measures. TCS reported a 5.3% year-on-year increase in consolidated revenue to ₹64,479 crore for the quarter ended March 2025. However, net profit dipped 1.69% to ₹12,224 crore, missing analyst expectations.
Despite the cautious stance on wage hikes, the company has continued its hiring momentum. TCS closed FY25 with a workforce of 6,07,979, a net addition of 6,433 employees over the year. In the fourth quarter alone, 625 new employees were added.
Lakkad confirmed that trainee onboarding for FY25 stood at 42,000 as planned, with fresher hiring likely to remain steady or slightly higher in the next fiscal year. “We continue to hire from campuses, and the number could be slightly higher this year than what we added last year,” he said. “Fresher hiring will be similar or may be higher in FY26.”
When asked about the quantum of potential hikes, Lakkad declined to comment, reiterating that any decisions would be made based on the evolving business climate.
On the employee retention front, TCS reported a marginal uptick in its attrition rate for Q4 FY25, rising to 13.3% from 13% in the previous quarter. However, Lakkad expressed confidence in the company’s ability to manage churn. “Although TTM attrition has marginally increased, our quarterly annualised attrition rate has come down by 130 basis points,” he said, indicating improved retention momentum in the short term.
The deferment of annual wage hikes comes at a time when several tech companies are tightening their belts, aiming to balance talent investments with profitability. TCS’s approach, while cautious, leaves room for flexibility should business conditions improve in the coming months.
As employees wait for clarity on pay revisions, TCS’s continued focus on onboarding fresh talent and managing attrition may provide some reassurance. The company’s measured approach signals a strategic alignment with the global market outlook, aiming to sustain long-term competitiveness while navigating current uncertainties.