TCS Taps the Brakes: Salary Hikes on Hold as HR Chief Signals ‘Wait & Watch

Tata Consultancy Services (TCS) India's largest IT services provider has not yet finalized its FY26 annual salary hike. Chief Human Resources Officer Milind Lakkad during the July 10 earnings press conference stated that no decision has been taken as there is prevailing macroeconomic and geopolitical uncertainty.

Key Highlights

TCS typically initiates salary hikes in April but this year's round has not yet occurred

Lakkad further said that treks can be declared at any time during the year based on business circumstances

Attrition rose to 13.8 percent in Q1 FY26, above the comfort level of 13 percent for the company

Despite the deferment, TCS recruited 5,090 net employees in Q1, bringing overall headcount to 613,069

Business Environment

CEO K Krithivasan attributed the cautious strategy to client reluctance and diminished discretionary expenditure

Q1 revenue was Rs 63,437 crore, which increased by 1.3 percent YoY but decreased 1.6 percent sequentially

Net profit rose 5.98 percent year-on-year last year to Rs 12,760 crore, supported by tax benefits, one-time in nature, and cost reductions

Industry Outlook

TCS can adopt lower hikes this year, which will be 4 percent to 8 percent—its lowest in four years, reports say.

Historical treks have been 10.5 percent in FY22, 6–9 percent in FY23, and 7–9 percent in FY24

The IT industry looks to remain under pressure from global wars, trade interruptions, and supply chain uncertainty

Sources: News18, Moneycontrol, Financial Express, Mint, MSN India, GoodReturns, News24 India