TCS Forgoes Salary Increments for FY25 Amidst Global Economic Slump

Holding salary hikes, India’s largest IT firm, Tata Consultancy Services (TCS) has incorporated employees. Although dictated by clients to commence on April, the company has delayed it because of uncertainty prevailing globally and slow client spending.

TCS Slams the Brakes on Raises

TCS confirmed a delay during the announcements during the earnings call. Chief HR Officer Milind Lakkad added that, “We will decide later in the year the appropriate time to implement the salary increases.” This well-priced approach is similar to the one that TCS often took for its salary hikes during the COVID pandemic.

While fixed salary hikes may come under close scrutiny, TCS continues to pay out quarterly variable bonuses. In Q4, 70% of employees received full variable pay, while others received performance-pay adjustments.

Clients Cutting Back

Many clients hold back on IT spending, according to CEO K Krithivasan. Delays in projects are due to continuing trade wars and fears of a global recession. If this continues, IT budgets across the board will take a greater hit.

TCS Stays on Track with Hiring

TCS has decided to continue hiring even in the face of economic headwinds. The company plans to bring in 42000 fresh engineers in FY26-well up on last year’s numbers. In FY25, TCS hired 6433 new employees; bouncing back with a minor margin from a drop of above 13000 the previous year.

However, the attrition rate of the company increased slightly to 13.3% during Q4 testing the firm of retaining talent.

Leadership Shake-Up

• TCS also announced two high-profile shifts in leadership.
• Aarthi Subramanian, former Chief Digital Officer at Tata Sons, will now be COO. May 1 is her first day on the job.
• Mangesh Sathe, who was last the CEO of Tata Strategic Management Group, joins as Chief Strategy Officer, focusing on global consulting and mergers.
• Krithivasan said leadership change is intended to bring TCS to strength in all emerging technology areas where its talent must be somewhere external.