India’s biggest IT company, Tata Consultancy Services (TCS), has delayed its annual salary hikes this year. This news came out on April 12, 2025. The company said that global problems like US tariff tensions and weak economic signals are the main reasons for this delay. Employee costs went up by only 4% in FY25, which is the slowest increase in the company’s history.
TCS usually gives salary hikes in the last quarter of the financial year. But this year, the company decided not to follow that routine. Instead, they are waiting to see how the global business situation changes. A lot of IT companies are now trying to save money and control costs. TCS is also doing the same due to worldwide business risks.
Also read: TCS Q4 Results 2025: Profit Drops 2% YoY, Dividend of Rs 30 Per Share Announced
Milind Lakkad, the Chief Human Resources Officer at TCS, said,
“Given the uncertainty, we will decide when to implement the increments. This year, the timing of the hikes will depend on the evolving environment.”
This means that employees might get their raises later in the year when things become more stable in the market.
TCS earns nearly 50% of its revenue from the US. But due to tensions between the US and other countries, especially on trade and tariffs, many companies are becoming careful with their money. The IT sector is being hit hard because of this, as clients are reducing their spending on technology services.
The situation reminds many people of the time during COVID-19, when TCS also delayed salary hikes. At that time in FY21, employee costs increased only 6.8%, which was much lower than the average 11% increase seen during the five years before the pandemic.
TCS Employee Costs and Hiring in FY25
Despite the salary hike delay, TCS spent ₹1.46 lakh crore on employees in FY25. This is a small increase from ₹1.40 lakh crore in the previous year. The company hired 6,433 new employees, taking the total headcount to 6,07,979 by March 2025.
TCS also onboarded 42,000 trainees in FY25. So while salaries may not have gone up much, the company is still bringing in fresh talent.
One concern for the company is that employee costs are rising faster than revenue and profit. Between FY21 and FY25:
| Metric | CAGR (FY21–FY25) |
|---|---|
| Employee Costs | 11.2% |
| Revenue Growth | 10.2% |
| Net Profit Growth | 8.5% |
In simple words, the money spent on employees is growing faster than the money the company is making. This gap could hurt the company’s overall financial health if it continues.
Looking further back, between FY16 and FY20, TCS’s net profit was growing at 10.1%, which was much slower than the 23% growth seen between FY11 and FY15. Clearly, the company’s growth pace has slowed down over the years.
TCS shares closed at ₹3,231.50 on Friday (April 11, 2025), which is 0.50% lower than the previous day. The stock has not performed well this year. It has dropped 20% so far, while the Nifty50 index has only gone down by 3.5% during the same period. This underperformance might be linked to the delayed salary hikes and slow profit growth.
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