Tata Consultancy Services (TCS) has deferred its annual salary hike decision for FY25, citing global economic uncertainty and stalled deal closures, in a rare move that underscores the deepening strain in the tech job market.

India’s largest IT services firm usually begins its wage hike cycle on April 1, but this year it has hit pause — with no clarity on when the hikes will resume.

“We haven’t been able to take a decision yet on wage hike cycle,” said Chief HR Officer Milind Lakkad during the Q1FY26 earnings call on July 10. “An update will come once the situation improves.”

TCS’s top brass cited a sluggish macroeconomic environment, cautious customer sentiment, and geopolitical instability as key reasons for delayed client decisions and paused projects. 

The firm’s revenue for the quarter slipped 1.6% sequentially to ₹63,437 crore, even as net profit rose 4.4% due to one-time tax gains and project savings.

CEO K Krithivasan pointed to “intensified delays” in discretionary tech spending and project kickoffs, blaming global conflicts and supply chain volatility. “Demand contraction continues due to global disruptions,” he said.

The freeze on wage hikes is significant in an industry where annual raises are a near certainty. It reflects a larger trend of constrained growth and tightening budgets across the IT sector.

TCS added 5,090 employees on a net basis this quarter, taking its total headcount to 6,13,069. But its ability to absorb the 42,000 fresh engineering graduates it hired last year has been weakened by the downturn.

While the company is sticking to its FY26 hiring target of 40,000 graduates, Lakkad hinted at potential recalibration depending on business performance. “Hiring shouldn’t be connected to quarterly growth,” he noted.

Despite subdued topline figures, TCS remains focused on long-term planning, even as short-term uncertainties cloud compensation and onboarding plans.