India’s top-rung IT services companies TCS, Infosys and Wipro disappointed with their March quarter and full year FY25 scorecards on multiple counts and collectively signalled heightened caution up ahead, as macro uncertainties compounded by global trade woes eroded sentiments and weighed on business outlook.
The overhang of macro concerns reflected on several fronts, from muted outlook to hesitation to commit upfront on wage hikes, as management commentary from India’s billion-dollar IT powerhouses remained largely sobering in the just-ended quarter. Hiring trends fared a tad better. TCS, Infosys, and Wipro cumulatively added 1,438 employees between Q3 and Q4 FY25, marking a shift, and indeed a reversal, from declines of over 900 seen in the previous quarter.
With US tariff posturing swiftly resetting global trade dynamics, the tone of business commentary in Q4 was punctuated with references to underlying uncertainties and caution. ”The global industry environment remained uncertain for most of the year and the recent tariff announcements have only added to that… Even though the underlying demand for tech reinvention remains strong, clients are approaching it more cautiously,” Wipro CEO and Managing Director Srinivas Pallia said during the recent earnings’ conference. Market watchers say the industry is navigating a complex landscape, balancing growth ambitions with strategic caution.
Attention will now turn to other IT companies that are slated to announce their results in the coming days. For now, the US-induced tariff shocks and President Donald Trump’s shifting trade policies have dashed any hopes of a recovery, and its overhang is visible on subdued financial metrics, and outlook within industry and beyond. UN Trade and Development (UNCTAD) cautioned that the world economy is on a recessionary trajectory, driven by escalating trade tensions and persistent uncertainty, and projected that worldwide growth could slow to a mere 2.3 per cent in 2025. IMF expects global growth to be hit by rising trade tensions although it has ruled out a global recession.
While the country’s largest IT services firm Tata Consultancy Services (TCS) reported a 1.7 per cent decline in the March quarter net profit to Rs 12,224 crore, India’s second-largest IT company Infosys reported an 11.7 per cent decline in consolidated net profit to Rs 7,033 crore for Q4FY25. TCS’ Managing Director and Chief Executive K Krithivasan said the firm expects FY26 to be better than FY25 on the revenue front, but acknowledged the ongoing challenges. There are delays in decision-making when it comes to discretionary spending, he said, adding that there are some project ramp-downs as well.
Infosys guided for a revenue growth of 0-3 per cent in constant currency terms for the current fiscal year (a forecast said to be its lowest in a decade barring pandemic period), as Infosys CEO and MD Salil Parekh cited uncertainty in the environment. Smaller rival Wipro signalled a weak quarter ahead with upto 3.5 per cent expected sequential drop in IT services revenue for Q1FY26, as CEO Pallia admitted that clients remain cautious in the face of macroeconomic uncertainty but assured that the company is focused on partnering closely with them, while remaining sharply focused on consistent and profitable growth.
TCS announced that it will be deferring wage hikes to its 6.07 lakh employees due to the business uncertainties triggered by the tariff issues, and Wipro said wage hikes for FY26 will be decided closer to date.
For the full fiscal ended March 2025, the combined net headcount addition between the big three surpassed 13,500, with TCS leading the chart. The Tata Group software behemoth exited the fiscal year with 6,07,979 employees. It hired 42,000 freshers from campuses in FY25, and will maintain or improve on the number in FY26, the company’s Chief Human Resources Officer Milind Lakkad said. Wipro, whose employee count at the end of FY25 stood at 2,33,346, did not specify hiring targets for FY26 but confirmed that it had recruited the intended numbers for FY25 (about 10,000). Vamsi Karavadi, Partner, Deloitte India, says the IT hiring outlook for FY26 will be shaped by global developments and economic conditions.
"Recent US tariff announcements have heightened economic uncertainty, leading to tighter client budgets and a nearly 10 per cent decline in IT hiring in early 2025. Despite a strong FY25 performance, Indian IT firms are cautiously optimising resources and enhancing operational efficiencies,” Karavadi said. The situation is dichotomous: tariffs are prompting spending reconsiderations, yet over 50 global capability centres are established annually, indicating ongoing investment. ”The shift in hiring mix is driven by both tariffs and the adoption of AI and digital capabilities. So, the change is the hiring outlook is influenced in equal parts by both the approaches,” said Karavadi, who believes that freshers will still find opportunities, but at a slower pace, with a focus on niche skills, transformation capabilities, and AI-related roles. Raja Lehri, IT Consulting partner, Grant Thornton Bharat, however, believes that India’s IT services sector is in reset mode, of a different kind.
"AI isn’t just trimming campus hiring — it’s rewiring the talent model… TCS maintained a steady hiring number at 42,000 trainees in FY25, while building a 100,000-strong base of GenAI-ready consultants,” noted Lehri. Wipro, he said, has trained 250,000 in GenAI and invested USD 1 billion into its ai360 initiative, all while holding fresher hiring flat at around 10,000 for two consecutive years. ”This isn’t cyclical restraint — it’s a structural shift… In FY26, muted hiring shouldn’t be misread as weakness — it’s a recalibration. India’s IT giants aren’t downsising. They’re doubling down on high-skill, high-impact transformation,” Lehri added.
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