TCS CHRO Backs Wage Hike Delay, Highlights New Hiring Approach Amid AI and Tariff Risks

Wage Hike Deferment Deemed ‘Prudent’ Amid Geopolitical, Macroeconomic Headwinds

Tata Consultancy Services (TCS), India’s largest IT services firm, will defer its wage hike cycle in FY26 as part of a cautious strategy in response to ongoing global economic uncertainty, including the re-imposition of tariffs by US President Donald Trump. Chief Human Resources Officer (CHRO) Milind Lakkad, who is set to retire soon, framed the move as a prudent response to a volatile business climate rather than a structural shift in policy.

“This is only the second time since COVID that we’ve done this. We don’t like to defer hikes at TCS, but in this environment, we thought it was the right thing,” Lakkad said. The company will continue to monitor the global environment and reassess compensation decisions periodically rather than commit to fixed timelines.

At the end of FY25, TCS’ total headcount rose modestly by 6,433 to 607,979, suggesting a phase of controlled expansion aligned with demand, attrition management, and internal reskilling efforts.

Highlights:

• TCS delays wage hikes for FY26 citing global volatility and U.S. tariffs.

• Total headcount reached 607,979, up by 6,433 from FY24.

• CHRO Milind Lakkad confirms deferment decision will be revisited continuously.

FY25 Freshers Hiring Exceeds Target; AI-Driven Skills Now Crucial

TCS hired 42,000 freshers in FY25, exceeding its target of 40,000, driven by a long-term strategy to build AI and digital capability internally. Notably, 40% of freshers hired in FY25 were skilled in niche digital domains, including artificial intelligence, up sharply from 17% in FY24. Lakkad affirmed this shift aligns with the firm’s strategy of sourcing high-end digital skills through campus hiring while continuing to invest in lateral hires from the market.

Despite external shocks and internal cost management, TCS intends to continue large-scale fresher hiring in FY26, reflecting both anticipated attrition and long-term project requirements. However, Lakkad cautioned that headcount growth is not directly correlated with quarterly demand but driven by long-term planning, internal training, and deployment cycles.

Highlights:

• TCS exceeded FY25 fresher hiring target with 42,000 recruits.

• 40% of freshers hired had AI or niche digital skills.

• FY26 hiring will focus on sustaining digital capabilities and offsetting attrition.

Generative AI Expands Business Opportunities, Spurs Skills Transformation

Lakkad acknowledged the rapid integration of generative AI in software development, testing, documentation, and client-facing processes, leading to enhanced productivity and new business avenues. He noted that projects involving migration to modern cloud environments, which were previously cost-prohibitive, are now feasible and attractive due to AI-driven efficiency.

As per Lakkad, the firm is handling 10 pipeline projects that have opened up because of generative AI, reinforcing that automation is enabling—not replacing—job opportunities by creating demand for new digital services and business models.

Highlights:

• TCS is leveraging Gen AI across code development, testing, and customer engagement.

• 10 new AI-driven projects have been initiated, reflecting expanding business scope.

• AI is not seen as a job destroyer but a capability enhancer for IT service delivery.

Strategic Bench Management and Offshoring Not Influenced by Visa Policy Shifts

Despite increasing uncertainty over U.S. H-1B visa policy, Lakkad dismissed the notion that TCS is deliberately reducing on-site staff or shifting work offshore. He emphasized that the company maintains a “visa agnostic” model, supporting robust hiring across all geographies, including continued recruitment in U.S. campuses.

The average bench timeline—time taken to deploy unassigned employees—has shortened from 45–60 days to 35–45 days, driven by tighter resource planning and stronger talent engagement. However, Lakkad asserted that the fundamentals of bench management remain unchanged and are not materially impacted by new technologies or policy shifts.

Highlights:

• TCS affirms its visa-agnostic global delivery model.

• H-1B visa procurement continues; no shift toward deliberate offshoring.

• Bench deployment timelines have shortened but management strategy remains consistent.

FY26 Hiring to Prioritize AI-Centric Talent, Maintain Balanced Workforce Strategy

Looking ahead, TCS plans to continue targeting high-skill campus recruits and experienced lateral hires with AI and digital capabilities. In FY25, 50% of lateral hires came from the market with such high-end skills, reflecting a consistent trend. While hiring targets will remain flexible, the company will focus on managing attrition within desired bands and aligning talent development with business demand.

Lakkad reiterated that the final hiring number is a by-product of business strategy, not an isolated KPI. The firm’s approach to recruitment, training, and deployment continues to be shaped by its long-standing operating model focused on long-term capability building rather than short-term hiring fluctuations.

Highlights:

• FY26 hiring to prioritize niche digital and AI skills across campus and lateral channels.

• Attrition and demand alignment will guide overall headcount planning.

• Hiring targets are dynamic outcomes of business needs, not static goals.