Tata Consultancy Services (TCS), India's largest information technology (IT) services firm by revenue, said it was deferring salary increases for employees in April, citing growing macroeconomic uncertainty exacerbated by the ongoing tariff war between the United States and other countries.

At a press conference, company executives stated that the hikes will be implemented later in the fiscal year, once the outlook improves and there is greater clarity.

"We will decide when to raise wages this year," said Milind Lakkad, TCS's chief human resources officer.

The decision is similar to one made at the start of the pandemic five years ago, when global business came to a halt. It also reflects the caution that is sweeping the IT services industry as companies tighten their budgets.

While salary increases are on hold, TCS will continue to offer quarterly variable payouts. For Q4, 70% of employees will receive 100% of their variable pay, while the remainder will be determined by business performance.

Discretionary spending remains constrained. Over the last month, the company has experienced delays in project ramp-ups and spending as clients seek tariff clarity.

"If this trend continues, discretionary spending will be delayed," said K Krithivasan, CEO and Managing Director.

About 42,000 engineers from campuses will be hired by TCS in 2025–2026; this roughly corresponds to the number of engineers committed and onboarded in 2024–2025 (FY25). The company brought on 625 new staff members during the fourth quarter, which concluded on March 31.

After declining by 13,249 the year before, headcount rose by 6,433 for the year. Attrition rose from 13.1% in the prior quarter to 13.3% in Q4FY25. TCS had 607,979 employees in March.