Cautious Narrative and Sobering Outlook for Top IT Companies Amid Tariff Challenges

India's leading IT firms, TCS, Infosys, and Wipro, reported disappointing results for the March quarter and the full fiscal year 2025. These companies signalled caution due to macroeconomic uncertainties and global trade issues affecting business outlooks. Management commentary from these IT giants reflected a cautious approach, with hesitancy in committing to wage hikes amid ongoing challenges.

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Despite the challenging environment, hiring trends showed improvement. TCS, Infosys, and Wipro collectively added 1,438 employees between Q3 and Q4 FY25. This marked a reversal from the previous quarter's decline of over 900 employees. However, the broader industry environment remained uncertain due to recent US tariff announcements impacting global trade dynamics.

Global Trade Uncertainty Affects IT Sector

The impact of US tariffs and President Donald Trump's shifting trade policies has dampened hopes for recovery. This uncertainty is evident in subdued financial metrics across the industry. UNCTAD warned that escalating trade tensions could slow global growth to 2.3% in 2025. Meanwhile, the IMF expects rising trade tensions to affect global growth but does not foresee a recession.

TCS reported a 1.7% decline in net profit for the March quarter, amounting to Rs 12,224 crore. Infosys saw an 11.7% drop in consolidated net profit to Rs 7,033 crore for Q4FY25. TCS's CEO K Krithivasan anticipates better revenue performance in FY26 but acknowledged ongoing challenges like delays in discretionary spending decisions.

IT Companies Adjust Hiring Strategies

Infosys projected a revenue growth of 0-3% in constant currency terms for the current fiscal year, its lowest forecast in a decade outside the pandemic period. CEO Salil Parekh cited environmental uncertainty as a key factor. Wipro expects up to a 3.5% sequential drop in IT services revenue for Q1FY26 due to client caution amid macroeconomic uncertainty.

TCS announced it would defer wage hikes for its 6.07 lakh employees due to business uncertainties caused by tariff issues. Wipro stated that wage hikes for FY26 would be decided closer to the date. For FY25, TCS led with a net headcount addition of over 13,500 employees and plans to maintain or improve this number in FY26.

Adapting to New Realities

Wipro ended FY25 with an employee count of 2,33,346 but did not specify hiring targets for FY26. The company confirmed it met its FY25 recruitment target of about 10,000 employees. Deloitte India's Vamsi Karavadi noted that recent US tariffs have tightened client budgets and led to a nearly 10% decline in early 2025 IT hiring.

Despite strong FY25 performance, Indian IT firms are optimising resources and enhancing operational efficiencies cautiously. Tariffs are prompting spending reconsiderations while over 50 global capability centres are established annually, indicating ongoing investment.

Focus on High-Skill Roles

The shift in hiring is influenced by tariffs and AI adoption. Freshers will find opportunities at a slower pace with a focus on niche skills and AI-related roles. Raja Lahiri from Grant Thornton Bharat believes India's IT sector is undergoing a structural shift rather than cyclical restraint.

Lahiri noted that AI is reshaping talent models rather than merely reducing campus hiring. TCS maintained steady hiring at 42,000 trainees while building a base of GenAI-ready consultants. Wipro trained 250,000 employees in GenAI and invested USD 1 billion into its ai360 initiative while keeping fresher hiring flat at around 10,000 for two years.

This recalibration reflects a focus on high-skill transformation rather than downsizing. India's IT giants are doubling down on high-impact roles as they adapt to new realities.