Tata Consultancy Services (TCS), India's third-largest company by market capitalisation and one of the largest private sector employers in Kerala, announced its full-year financial results for FY25 on April 10. While the headline numbers didn't throw up much of a surprise, the more significant takeaway was the forward-looking guidance on business growth and hiring.
TCS reported muted earnings growth for FY25, with revenue rising by 5.7% year-on-year to ₹2.59 lakh crore and net profit increasing 5.9% to ₹48,797 crore.
After experiencing its first annual headcount decline in 19 years during FY24, TCS saw a modest increase in its workforce in FY25. The total employee count rose by 6,433 during the year, reaching 607,979 as of March 31, 2025. The net addition in the final quarter (January-March 2025) was a meagre 625 employees.
While TCS did not provide a specific net headcount addition target for the current year (FY26), Chief Human Resources Officer (CHRO) Milind Lakkad outlined plans for fresher intake. "We have onboarded 42,000 trainees in FY25, and the FY26 number will be similar or little higher," Lakkad said during the post-results press conference. He also indicated a strategic focus on recruiting talent with expertise in emerging and niche technology areas, including AI, cloud computing, cybersecurity, and data engineering.
However, for existing employees, Lakkad announced a delay in the annual wage hike cycle for this year. Citing the uncertain business environment, he mentioned that decisions regarding salary increases would be made later in the year based on evolving business conditions.
Despite overall growth, TCS faces headwinds, particularly from a slowdown in global economic growth. Revenue from North America, its largest market contributing 48.2% of the business, experienced a decline of 1.8% during FY25.
However, TCS secured strong order wins, reporting a Total Contract Value (TCV) of $39.4 billion (approximately ₹3.4 lakh crore) for FY25. TCV reflects the total value of contracts signed during the year, including new deals and renewals. A robust TCV signals a healthy pipeline of future business opportunities.
Encouraged by the strong order book, CEO and MD K Krithivasan said he expects FY26 to be a better year than FY25.
Despite the optimism, significant concerns remain for TCS and other IT firms. Economic policies under the Donald Trump administration, especially around tariffs, are adding to the already uncertain business environment. These developments have started to impact business sentiment and raise fears of a potential slowdown or recession, both in the US and globally. Such a scenario could prompt clients to delay or cancel projects, directly affecting TCS’s revenue outlook. This, in turn, may influence the company’s hiring plans and decisions regarding employee salary hikes in the months ahead.
