TCS faces profit drop and delays salary hikes amid uncertainties

Tata Consultancy Services (TCS), a leading IT firm in India, announced a 1.7% decline in its net profit for the quarter that wrapped up in March 2025, with profits recorded at Rs 12,224 crore. This downturn is attributed to narrowing margins and comes as the company takes the lead among major IT players in revealing financial results for the January to March quarter. The slight dip in quarterly performance has stirred concerns regarding the sustainability of profit in an increasingly volatile market. Despite the Q4 setback, TCS did report an annual profit increase of 4.2% for the fiscal year 2025, culminating in a total of Rs 48,553 crore, indicating some resilience in overall financial health. However, coupled with this profit decline is the decision to delay salary hikes for TCS's workforce, which totals around 607,000 employees. This decision has been made against a backdrop of troubling business uncertainties, with management pointing to slower client spending and global tariff concerns as significant contributors. The company's leadership, led by CEO and Managing Director K Krithivasan, has forecasted a cautiously optimistic outlook for fiscal year 2026, suggesting potential improvements in revenue but also acknowledging significant pressures and project adjustments that could impact the workforce. The news of salary hike postponements has not gone down well with employees who took to social media to express their frustrations. Many highlighted the contrast between the pay increments given during better business cycles compared to the current situation and criticized the management's handling of the workforce's financial well-being. Employees are feeling disillusioned, with some asserting that they might reduce their work efforts in response to the company's actions. The overall sentiment suggests that more than just financial metrics are at play; employee morale and confidence in management's commitment to their well-being are under strain. In conjunction with these financial developments, TCS also announced leadership changes, appointing Aarthi Subramanian as the new COO and Mangesh Sathe as the chief strategy officer. These appointments signify TCS's proactive approach to build new skills and adapt to the evolving technological landscape. The strategic goal appears to be enhancing the company's ability to navigate uncertainties and reshape its roles to attract and secure new partnerships. As TCS moves to fortify its leadership during challenging times, rebuilding confidence among its workforce may be slow as employees grapple with the implications of the salary delays and the evolving market landscape.