TCS

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Peter Thal Larsen

LONDON, Sept 28 (Reuters Breakingviews) - Welcome to the first edition of The Week in Breakingviews! For the past few years, I’ve been writing a regular roundup for the global team. Several people encouraged me to offer it to a wider audience, so I’m very excited to start sharing these reflections with you. Please email me with any suggestions. And if you’re not already a Breakingviews subscriber, sign up for a free trial here.

OPENING LINE

“The ouroboros – a dragon eating its own tail, signifying eternal recurrence – is as apt a symbol for the modern mysticism of artificial intelligence as it was for ancient Egypt.”

Read more here: Nvidia adds $100 bln to AI’s load-bearing startup.

FIVE THINGS I LEARNED FROM BREAKINGVIEWS THIS WEEK:

1. The number of employees of Tata Consultancy Services TCS.NS on H-1B visas has halved since 2021.

2. Companies valued at more than 10 times sales account for a record 35% of the value of the S&P 500 Index.

3. Stablecoin operator Tether paid dividends of $7.4 billion in the first half of 2025, almost as much as JPMorgan JPM.N.

4. One in 25 UK citizens by the end of 2024 had arrived after Britain introduced a new points-based immigration system.

5. Japanese prime ministerial hopeful Sanae Takaichi wants the finance ministry to present a plan to double the country’s GDP in 10 years.

EXCEPTIONAL AMERICANISM

At the end of last year, one phrase kept cropping up in my conversations with professional money managers: “American exceptionalism”. U.S. markets had produced superior performance for so long that they had sucked in capital from around the planet. American equities accounted for 67% of the MSCI All-Country World Index. Giant companies like Nvidia NVDA.O were worth more than many countries’ entire stock markets. How long could this continue?

Since Donald Trump returned to the White House in January, investors have had plenty of opportunities to rethink. Just consider what the president has said and done in the past week alone. His administration upended immigration rules by chaotically slapping a $100,000 fee on new applications for H-1B visas, the main method for American companies to lure talented workers from around the world. He has cancelled renewable energy projects, telling the United Nations that “they don’t work”.

Trump’s tariff war on U.S. trading partners continues: branded pharmaceuticals, heavy trucks and kitchen cabinets are the latest product categories to face import levies. He has sent the U.S. Department of Justice after his enemies, filing criminal charges against former FBI Director James Comey. And the president is exerting his authority over private companies. On Thursday he blessed a deal to transfer 80% of TikTok’s U.S. assets from its Chinese owner ByteDance to a new consortium at a supposed valuation of $14 billion, far below most estimates of the short video app’s worth. If that figure is accurate, the transaction would amount to state-enabled expropriation on a scale rarely seen outside Vladimir Putin’s Russia.

Judging by financial markets, however, little has changed. After a brief dip in April when Trump launched his trade war, all three main U.S. stock market indices have risen to all-time highs. American equities still account for 65% of the global benchmark, even though a decline in the dollar has lifted the relative value of non-U.S. stocks. The U.S. dollar remains the dominant currency for global trade and payments.

These two trends strike me as incompatible. Lower taxes, deregulation, and the ongoing artificial intelligence boom may pump up corporate earnings for a while. Yet a country which is at best indifferent – and at times downright hostile – to companies and workers from overseas may struggle to attract capital on the same scale as in the past. Promises of loans and loan guarantees extracted from Japan and South Korea in return for lower tariffs may help, as Trump adviser-turned-Fed Governor Stephen Miran argued this week. Eventually, however, investors may be forced to conclude that a country with an increasingly volatile and unpredictable government deserves a less exceptional rating.

CHART OF THE WEEK

Javier Milei has won many admirers since he became president of Argentina in 2023. Yet while the libertarian economist has balanced the government’s books and calmed inflation, the country’s international position remains precarious. Argentina is still not attracting enough foreign capital to service its foreign-currency debt. No wonder Milei is seeking support from the Trump administration.

THE WEEK IN PODCASTS

Who would want to run a big global car company? Already grappling with the transition from combustion engines to battery-powered vehicles, executives must now steer around Donald Trump’s tariffs. On The Big View this week, Nissan Motor 7201.T CFO Jérémie Papin told our Asia autos columnist Katrina Hamlin how things look from the Japanese carmaker’s boardroom.

The Trump administration’s $100,000 fee for hiring skilled foreign workers sent panic through tech giants like Microsoft MSFT.O, while upending hiring policies at companies from JPMorgan to India’s Tata Consultancy Services. Aimee Donnellan and Jonathan Guilford invited Una Galani and Rob Cyran on to the Viewsroom to debate the fallout and explain how the policy clashes with other U.S. economic aims.

PARTING SHOT

There’s a long-established principle in global debt markets that governments can borrow at cheaper rates than companies. Yet the gap has narrowed and, in some cases, inverted. Among French companies with investment-grade credit ratings, 7% can borrow for less than the sovereign. As governments in the developed world grapple with high debt levels and large companies like Microsoft sit on vast cash piles, expect to see the credit markets get more freakish.

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(Editing by Liam Proud; Production by Oliver Taslic)

((For previous columns by the author, Reuters customers can click on LARSEN/[email protected]))

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Sept 23 - By Ira Dugal, Editor Financial News, with global Reuters staff

U.S. President Donald Trump's move to drastically hike H-1B visa fees will raise Indian technology firms' costs of hiring workers and providing services in the U.S., forcing them to rethink their operating models. It already set them back by nearly $10 billion in lost market value of their shares on Monday, the first day of trading, after the news, but the impact of the decision could go much beyond that. That's our focus this week.

And the Indian central bank is likely to opt for continuity in its inflation targeting framework. Scroll down for more on that.

THIS WEEK IN ASIA-PACIFIC

The candidates vying to be Japan's next leader

Hardest-hit Vietnam risks losing $25 billion from US tariffs, UN estimates

China cracks down on online content inciting hostility, pessimism

UK, Australia and Canada recognise Palestinian state, Israel condemns decision

Trump says 'bad things' will happen if Afghanistan does not return Bagram air base

A NEW 'MAGA' FRONT

Donald Trump has opened a new front in his fight for MAGA, or 'Make America Great Again', by driving up the fees on H-1B visas, used by foreign tech workers, most notably Indians. Train American workers instead, Trump said, making the announcement.

The decision put the tech industry squarely in the middle of the global trade and immigration tensions, leaving Indian firms rethinking their plans and policymakers calculating the wider hit from Trump's latest salvo.

The initial announcement - which suggested an annual fee of $100,000 on anyone with an H-1B visa entering the U.S. from September 21 compared with just a few thousand dollars previously - sparked panic, with companies asking workers who hold such visas and are overseas to rush back. Travellers cancelled plans and scrambled to find flights to the U.S.

India's foreign ministry said the move could disrupt families, adding that the U.S. and India have both benefited from mobility of skilled workers.

The final version, however, was watered down, imposing a one-time fee on new visas only. Nevertheless, global tech executives have pushed back, warning of rising costs for large companies and startups.

While Amazon AMZN.O uses the largest number of H-1B visas, leading Indian IT services firms are all among the top-10 sponsors of the visas. And Indians are the biggest beneficiaries of these temporary work permits.

Analysts expect the immediate financial impact on margins and profitability to be manageable but warn of rising uncertainties for the sector. Brokerage ICICI Securities pegged the average hit on earnings per share at about 6% while Jefferies estimated it at 4%-13% for different firms based on the nature of business and use of these visas. They did not specify the time period for the profit hit.

Read here to understand the impact on India's IT services model.

In response, the Nifty IT index .NIFTYIT fell 3% on Monday, wiping out nearly $10 billion in market value. The index of IT stocks has been the worst performer among sectoral indices in the Indian market so far this year, down 18% compared to a 6% gain for the benchmark Nifty 50 .NSEI.

RIPPLE EFFECTS WILL BECOME EVIDENT LATER

The wider implications of a clampdown on Indian tech workers in the U.S. will only play out over time.

With fewer such professionals welcome in the U.S., wage growth in the domestic industry could be hurt at a time when a squeeze on profitability and increased use of AI have already brought on job cuts.

The sector, which employs 5.67 million people, is a significant driver of demand in the Indian economy.

Citi analysts believe remittance flows from the U.S. could also be impacted over time but added that quantifying the impact is difficult.

Displaced workers could find a home in other countries such as Britain and South Korea, which are looking at easier visa policies to attract talent.

Some analysts believe the visa fee hike may eventually benefit India by increasing offshoring via global capability centres (GCC), used by foreign firms for a range of services from accounting to research, which have powered up the country's services exports in recent years.

The H-1B shock and increasing uncertainty "could accelerate GCC trajectory and lift GCC exports as a share of India’s total services exports over time," said Madhavi Arora, chief economist at Mumbai-headquartered Emkay Global Financial Services.

But this growth also could be short-circuited.

A bill known as the HIRE Act and introduced by U.S. Republican Senator Bernie Moreno has made the industry nervous. Any version of the bill, which proposes taxing companies that hire foreign workers over Americans, could limit the offshoring opportunity.

"If the repercussion of this (H-1B fee increase) is substantial offshoring, it might invite a reaction in terms of service tariffs or offshoring taxes," brokerage house Ambit Capital said in a note.

How will Trump's latest move impact India's tech sector and the broader economy? Write to me at [email protected].

MARKET MATTERS

India's central bank is likely to recommend maintaining the inflation target of 4% for another five years, Reuters reported.

The inflation targeting framework is up for review by March 2026.

The continuation of the target means predictability in the trajectory of interest rates but also leaves room for at least one more cut this year as headline inflation remains within the central bank's target while core inflation has been stickier.

The Reserve Bank of India had sought views on whether the target should be changed from headline inflation to core inflation and if the target band should be different from the current 2%-6%.

With most stakeholders backing the current framework, the central bank is likely to suggest its continuation to the government.

THIS WEEK'S MUST-READ

European Union nations are keeping a close watch on any wildlife export requests from India and, in particular, Vantara, a private zoo run by the philanthropic arm of a conglomerate controlled by Asia's richest family, the Ambanis.

Indian investigators cleared the sanctuary of any wrongdoing this week but its operations continue to draw global scrutiny.

Read here to know why the Spix's macaw, a vivid-blue parrot, found itself in the middle of controversy around Vantara.

(Reporting by Ira Dugal; Editing by Muralikumar Anantharaman)

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Sept 22 (Reuters) - Indian information technology stocks .NIFTYIT fell 3.6% on Monday after U.S. President Donald Trump imposed a $100,000 fee on new H-1B visa applications, threatening the sector's long-standing model of rotating skilled workers into the U.S.

The index was the top sectoral loser, dragging the benchmark Nifty 50 .NSEI 0.3% lower.

All 10 stocks on the index traded lower, with losses led by Tech Mahindra's TEML.NS 5.8% slump.

(Reporting by Kashish Tandon in Bengaluru; Editing by Janane Venkatraman)

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Sept 19 (Reuters) - Tata Consultancy Services Ltd TCS.NS:

• TATA CONSULTANCY SERVICES LTD - TO POWER RETAILERS WITH NVIDIA ACCELERATED COMPUTING

• TATA CONSULTANCY SERVICES LTD - EMBEDS NVIDIA AI SOFTWARE INTO RETAIL SOLUTIONS

Source text: ID:nBSE1mYznM

Further company coverage: TCS.NS

(([email protected];))

The authors are Reuters Breakingviews columnist. The opinions expressed are their own. Refiles to add correct topic code.

By Una Galani and Shritama Bose

NEW DELHI/MUMBAI, Sept 18 (Reuters Breakingviews) - In recent years, India has enjoyed a virtuous cycle. The fast growth and unusual stability of its $4 trillion economy has boosted the country’s confidence and standing in the world. But Donald Trump’s trade war and desire to bring jobs back to the United States could quickly undermine what Prime Minister Narendra Modi has called “India’s moment”.

The U.S. president’s decision to raise tariffs on imports of Indian goods to 50% puts the country at a competitive disadvantage to Asian peers and hurts its manufacturing ambitions. However, given that all overseas shipments generate just 11% of Indian GDP, the economy can absorb the blow. A greater threat is that deteriorating relations with the U.S. impact the country’s IT services industry which has played a leading role in India’s transformation over the past two decades.

Providing services to global companies including JPMorgan JPM.N, Goldman Sachs GS.N and Exxon Mobil XOM.N has created massive wealth, spurred the rise of major cities like Hyderabad and Bengaluru, and created the wall of money that has propelled the stock market, property prices, and the consumption of well-heeled Indians.

The two countries have resumed trade negotiations but New Delhi has limited bargaining chips. India is too poor for Modi to open its market to U.S. agricultural imports or to promise hundreds of billions of dollars of investment in the world’s biggest economy, as Japan has done. Meanwhile, India’s loose grip on supply chains means it cannot follow China’s lead by withholding exports of rare earths or other items.

Policymakers, industrialists and financiers in New Delhi and Mumbai are sympathetic to Modi’s position. They are also hopeful that Washington will quickly soften its stance to avoid pushing the South Asian country into the orbit of the People’s Republic. The alternative is too grim to contemplate.

A FINE BALANCE

Start with tariffs. If the 50% U.S. levy remains in place, it could wipe up to 0.6% off India’s GDP growth in the current financial year to the end of March, says V. Anantha Nageswaran, the nation’s chief economic adviser. Deduct this figure from the lower end of official forecasts and growth would shrink to 5.7%.

That’s unwelcome, but manageable. The tariff applies to only 13% of the $437 billion goods India shipped overseas last year, because pharmaceutical products and electronic items like Apple AAPL.O iPhones are exempt. Even so, Trump’s levy would lead to significant job losses because it makes goods from employment-intensive sectors like auto parts, gems, jewellery, and textiles unviable for export to the U.S.

A lower growth rate would leave India short of the minimum 6% annual pace New Delhi was targeting for the next decade, and well short of its potential of 8% or more. However, India could retain its status as the world’s fastest-growing large economy, ahead of China.

An attack on India’s services industry would be more severe. A sharp reduction of IT exports could lead to rocketing inflation and trigger a currency crisis because of the crucial balancing effect services exports have on India’s finances.

Services are an obvious if complicated target. Firms led by Tata Consultancy Services TCS.NS, Infosys INFY.NS and Wipro WIPR.NS generate up to 60% of their revenue from North America. Meanwhile, one in five Fortune 2000 companies have global centres in India.

Many multinational firms rely on Indians to handle their finance processes and deal with customer complaints. Though these hubs have evolved to include product engineering and innovation centres, including for artificial intelligence, the industry’s appeal remains rooted in its relatively low employment costs.

India’s services exports have grown at double the rate of the rest of the world between 2005 and 2023. Of the $341 billion India earned providing overseas services in the year ending March 2024, at least 30% or $103 billion came from the United States. That’s twice the value of goods exports targeted by Trump.

This model is now under attack from U.S. politicians eager to bring jobs back home. One symptom of the backlash is The Halting International Relocation of Employment Act, also known as the Hire Act, introduced this month by Ohio Senator Bernie Moreno. It proposes a 25% tax on outsourcing payments, defined as any money paid by a U.S. company or taxpayer to a foreign person whose work benefits U.S. consumers.

It’s unclear whether Trump supports the bill, and similar legislation has previously failed to win backing in Congress. But so long as Washington pursues an “America First” agenda, such threats will continue.

Reversing decades of outsourcing of services jobs would not be easy. A sudden move would leave global companies unable to file their accounts and support clients. Even a gradual shift could be fraught. The sheer number of English-speaking and numerically skilled workers in India cannot be found elsewhere.

Nevertheless, any sustained threat could be devastating, especially if AI also squeezes back-office headcounts. The crux of India’s recent economic stability is that it sells more services overseas than it buys from OpenAI, Perplexity, Alphabet’s GOOGL.O Google, and others. This helps contain the “twin deficits” in the country’s current account - a measure of its imports and exports – and in the government’s fiscal account.

Keeping a lid on these shortfalls prevents the rupee from depreciating too fast, curbs energy import costs, tames domestic inflation and reduces the need for politicians to spend borrowed money to support the large swathes of poor among the country’s 1.4 billion inhabitants. It has also helped to shrink the risk premium global investors assign to India.

When the twin deficits expand, India suffers. It experienced a sharp rupee depreciation and significant capital outflows during the 2013 “taper tantrum” when the U.S. Federal Reserve slowed down its bond purchases.

Modi has ways to offset the damage. His administration is doubling down on efforts to strike free trade agreements, including with the European Union. It is also waving through reforms to spur consumption and cut red tape. However, these steps are insufficient to replace lost American exports or truly unshackle Indian businesses.

Trump’s tariff war has shown the U.S. president is willing to inflict economic pain on his own country to try and achieve his aims. The risk for India is that what was a virtuous cycle for its economy turns into a vicious one.

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(Editing by Peter Thal Larsen; Production by Aditya Srivastav)

((For previous columns by the authors, Reuters customers can click on GALANI/ [email protected];; [email protected] ))

Sept 15 (Reuters) - Warehouse Group Ltd WHS.NZ:

• PARTNERS WITH TATA CONSULTANCY SERVICES TO SUPPORT MANAGED SERVICES TRANSFORMATION

Further company coverage: WHS.NZ

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Sept 12 (Reuters) - Tata Consultancy Services Ltd TCS.NS:

• TCS - SIGNS MOU WITH C-DAC TO STRENGTHEN INDIA’S SOVEREIGN CLOUD INFRASTRUCTURE

Further company coverage: TCS.NS

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By Haripriya Suresh and Urvi Dugar

BENGALURU, Sept 11 (Reuters) - India's massive IT sector faces a lengthy period of uncertainty with customers delaying or re-negotiating contracts while the U.S. debates a proposed 25% tax on American firms using foreign outsourcing services, analysts and lawyers said.

The sector is likely to be on the receiving end of a bill which, though unlikely to pass in its nascent form, will initiate a gradual shift in how big-name firms in the world's largest outsourcing market buy IT services, they said.

Still, with U.S. firms having to pay the tax, those heavily reliant on overseas IT services are likely to push back, setting the stage for extensive lobbying and legal battles, analysts and lawyers said.

India's $283 billion information technology sector has thrived for more than three decades exporting software services, with prominent clients including Apple AAPL.O, American Express AXP.N, Cisco CSCO.O, Citigroup C.N, FedEx FDX.N and Home Depot HD.N. It has grown to make up over 7% of GDP.

However, it has also drawn criticism in customer countries over job loss to lower-cost workers in India.

Last week, U.S. Republican Senator Bernie Moreno introduced the HIRE Act which proposes taxing companies that hire foreign workers over Americans, with the tax revenue used for U.S. workforce development. The bill also seeks to bar firms from claiming outsourcing payments as tax-deductible expenses.

The bill could not have come at a worse time for India's IT sector, which is struggling with weak revenue growth in its mainstay U.S. market as clients defer non-essential tech spending amid inflationary pressure and tariff uncertainty.

"The HIRE Act proposes sweeping changes that could alter the economics of outsourcing and significantly increase the tax liability associated with international service contracts," EY India's compliance head Jignesh Thakkar said.

In some cases, combined federal, state and local taxes could push the levy on outsourced payments as high as 60%, Thakkar said.

"While its partisan proposal may seem initially attractive, it's ultimately an artificial cost which makes organisations less competitive and profitable globally," said Arun Prabhu, partner at Cyril Amarchand Mangaldas.

Even so, the idea is gaining traction. This month, White House trade adviser Peter Navarro reposted a call from far-right activist Jack Posobiec for tariffs on services, not just goods.

"When political noise turns into regulatory risk, clients quickly insert contingencies, reopen pricing and demand delivery flexibility," said HFS Research President Saurabh Gupta.

"Clients will simply take longer to sign, longer to renew, and longer to commit transformation dollars," Gupta said.

Industry body Nasscom and IT firms Tata Consultancy Services TCS.NS, Infosys INFY.NS, HCLTech HCLT.NS, Tech Mahindra TEML.NS, Wipro WIPR.NS and LTIMindtree LTIM.NS did not respond to requests for comment on implications of the bill.

BACKLASH BECKONS

Companies are likely to lobby hard against the proposed bill and challenge it legally if passed, legal experts and industry watchers said.

"A bill like this would probably face a lot of backlash from U.S. companies that rely heavily on outsourcing, who would likely bring litigation to challenge various aspects of the bill, if it were ever to be passed into law," said Alcorn Immigration Law CEO Sophie Alcorn.

Sweeping restrictions are unlikely given the practical hurdles in enforcing the bill's provisions, experts said.

"More likely is a diluted version, with narrower provisions or delayed enforcement," said HFS Research CEO Phil Fersht.

The bill could also affect U.S. firms' global capability centres (GCCs), which have evolved from low-cost offshore back offices to high-value innovation hubs that support operations, finance, research and development.

"It will be hard to pull back from existing work, but new set-ups and expansion may get impacted," said Everest Group partner Yugal Joshi.

The proposed tax will impact the cost arbitrage advantage that is among the deciding factors when establishing a GCC, said Bharath Reddy, a partner at CAM.

"However, the lack of availability of appropriate human capital in the U.S. will continue as a problem, and which can be addressed in the near future only through outsourcing," he said.

(Reporting by Haripriya Suresh and Urvi Dugar in Bengaluru; Editing by Dhanya Skariachan and Christopher Cushing)

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Sept 5 (Reuters) - Tata Consultancy Services TCS.NS:

• SELECTED TO BUILD AI-ENABLED FINANCIAL SYSTEM FOR ODISHA

Source text: ID:nBSEZ3T96

Further company coverage: TCS.NS

(([email protected];))

Sept 2 (Reuters) - Tata Consultancy Services Ltd TCS.NS:

• TCS PARTNERS WITH TRYG

• TCS PARTNERS WITH TRYG ON A €550M DEAL

• DEAL TO PROPEL GROWTH WITH COMPREHENSIVE DIGITAL TRANSFORMATION OVER THE NEXT 7 YEARS

  
  

Further company coverage: TCS.NS

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Sept 1 (Reuters) - Tata Consultancy Services Ltd TCS.NS:

• TCS COMPLETES POLICY MIGRATIONS FOR LLOYDS BANKING GROUP’S SCOTTISH WIDOWS

Source text: ID:nnAZN4G0PW4

Further company coverage: TCS.NS

(([email protected];;))

Adds more details on the unit, background including on Kapur in paragraphs 4-5, 8, analyst comments in paragraphs 9-10

By Sai Ishwarbharath B

BENGALURU, Aug 26 (Reuters) - India's largest IT firm Tata Consultancy Services TCS.NS formed a new unit for artificial intelligence-based operations on Tuesday and named insider Amit Kapur as its chief, a company memo seen by Reuters showed.

The new AI and services transformation unit will house all of the company's existing capabilities in the technology with an aim to deepen its focus on AI domain solutions and accelerate innovation, the memo said.

TCS' formation of the new unit comes a month after the sector bellwether announced plans to cut 12,000 jobs, flaring up signals that India's $283 billion outsourcing sector could see more layoffs as the use of AI deepens.

Indian IT companies are racing to adopt and offer more AI products to attract client spending, which has been suppressed for many quarters due to global macro-economic uncertainties.

"Over the last few years, TCS has made major forays on the AI front by scaling our capabilities, reskilling our workforce and deepening our partnerships," the company said in the memo.

Kapur, who has been with the firm for two decades, takes charge of the unit from September. He last headed TCS' UK and Ireland business.

The company did not immediately respond to Reuters' request for comment seeking confirmation on Kapur's appointment and formation of the unit.

TCS is the first among Indian IT companies to dedicate a business catering solely to AI and allied technologies, and follows a similar move by U.S. rival Accenture ACN.N in June.

"IT firms have started to think that AI-led transformation is their only major lever now to accelerate growth amid tepid macros," said Pareekh Jain, founder of IT research firm
EIIR Trend.

"The change is also a reflection of extracting more AI-focussed projects from clients."

(Writing by Hritam Mukherjee; Editing by Sonia Cheema and Leroy Leo)

(([email protected]; X: @MukherjeeHritam;))

Aug 19 (Reuters) - Tata Consultancy Services Ltd TCS.NS:

• TCS - LAUNCHES NEW AI-ENHANCED OPERATIONS CENTER IN LATIN AMERICA

Source text: ID:nBSE3Zvpb6

Further company coverage: TCS.NS

(([email protected];))

By Sai Ishwarbharath B

Aug 14 - Cognizant CTSH.O will delay its annual wage hikes, with pay increases for about 80% of its global workforce now set to take effect on November 1, according to a company statement sent to Reuters in an email on Thursday.

India is a major hub for the IT firm with over two-thirds of its total employees, which are around 343,800. The annual wage hike was due in August but was delayed due to macroeconomic factors, CFO Jatin Dalal said last month, referring to tariff-related uncertainties. The employees were last awarded increments last August.

The Teaneck, New Jersey-headquartered firm's move comes a week after India's largest IT firm, Tata Consultancy Services TCS.NS, announced its annual hike after a five-month delay.

"This (wage hike) aligns with its announcement during its second quarter earnings that it plans to award merit-based salary increases for the vast majority of employees during the second half of 2025," the company's email said.

The hikes will be delivered up to, and including, the senior associate levels, the company said, and will depend on individual performance ratings and countries.

The wage hike cycle for the remaining workforce has not been determined at this time, they said.

Last month, the company forecast third-quarter revenue above Wall Street expectations, owing to strong spending from customers looking to integrate artificial intelligence into their platforms.

The company forecast third-quarter revenue between $5.27 billion and $5.35 billion, compared with analysts' expectations of $5.27 billion, according to data compiled by LSEG.

(Reported by Sai Ishwarbharath B in Bengaluru; Editing by Harikrishnan Nair)

((<[email protected]>))

Adds reporters' bylines

By Sai Ishwarbharath B and Haripriya Suresh

BENGALURU, Aug 8 (Reuters) - Indian outsourcing giant Tata Consultancy Services' TCS.NS decision to cut over 12,000 jobs signals the start of a broader AI-fueled trend that could end up eliminating around half a million jobs over the next two to three years from the $283 billion sector, experts said.

While TCS pegged the move to shed 2% of its workforce to skill mismatches rather than AI-related productivity gains, experts viewed the largest-ever layoffs by India's top private employer as the beginning of things to come in the labour-intensive sector. Roughly 12,200 TCS middle and senior management jobs will be lost.

The industry, which has played a crucial role in creating a middle class in India, is increasingly seeing AI being used for everything from basic coding to manual testing and customer support.

The sector employed 5.67 million people as of March 2025 and accounted for over 7% of India's GDP. It has a huge multiplier effect due to the direct and indirect jobs it creates and the cars-to-homes consumption it drives in the world's fifth-largest economy.

It has historically absorbed a majority of India's engineers but that will change as rising AI use ekes out more efficiencies and demands newer skills that many current employees lack, according to half a dozen industry veterans, analysts, and staffing firms.

"We are in the midst of a massive transition that will transform white-collar work as we know it," said Silicon Valley-based Constellation Research founder and chairman Ray Wang, echoing other experts who warned that more layoffs are likely on the cards.

The most vulnerable employees include pure people managers with minimal tech knowledge, those in charge of testing or identifying bugs and ensuring user-friendliness before delivering software to clients, and infrastructure management staff who provide basic tech support and ensure networks and servers are working well, experts said.

"About 400,000 to 500,000 professionals are at risk of being laid off over the next two to three years as their skills don't match client demands," tech market intelligence firm UnearthInsight's founder Gaurav Vasu said, adding that about 70% of those layoffs would impact workers with 4-12 years' experience.

"This (fear stemming from TCS layoffs) may hurt consumer demand for tourism, luxury shopping and even delay long-term investments such as real estate," Vasu said.

TCS and its peers Infosys INFY.NS, HCLTech HCLT.NS, Tech Mahindra TEML.NS, Wipro WIPR.NS, LTIMindtree LTIM.NS, and Cognizant CTSH.O collectively employ over 430,000 workers with 13 to 25 years of experience, according to staffing firm Xpheno.

"At the moment, they may appear like the big fat middle layer," Xpheno's co-founder Kamal Karanth said. None of the IT firms responded to Reuters queries seeking comment.

"With cost optimization being the key driver for new deal wins, clients are asking for productivity benefits - a trend which is also growing due to the rise in AI adoption. This requires IT firms to do more work with the same number of employees or the same work with fewer employees," Jefferies analyst Akshat Agarwal said in a research note.

ADAPT OR PERISH

TCS, which had more than 613,000 workers before the layoffs, said in its late July announcement it was gearing up to be "future-ready" by investing in new technologies, entering new markets, deploying AI at scale for its clients and itself, and realigning its workforce model. It did not answer Reuters queries on how many layoffs were tied to AI adoption and why it could not redeploy the affected employees.

"This is very devastating news," said a 45-year-old, Kolkata-based TCS employee affected by the latest layoffs. "It is very difficult for people my age to get new jobs."

Some others who are still at TCS fretted over its mediocre performance bonuses for senior employees in recent quarters, a new "bench policy" that limits the time somebody could be without a project regardless of personal circumstances or past performance, on-boarding delays, and the emotional turmoil caused by the layoffs.

"All these developments have tanked the morale of mid-career folks like me," a Pune-based TCS employee said.

The Indian outsourcing sector has been a key employment engine since the 1990s, offering upward mobility to millions of engineers. But revenue growth has weakened recently as its clients, stung by inflation and U.S. tariff uncertainty, defer discretionary spending and demand better cost management.

"The tech industry is at an inflection point, as AI and automation move to the very core of how businesses operate," industry body Nasscom said.

During past tech revolutions, disruption was felt at the organisational level.

"With AI, for the first time, the onus is on the individual to reinvent or re-skill themselves," former Tech Mahindra CEO CP Gurnani said.

(Reporting by Sai Ishwarbharath B and Haripriya Suresh; Editing by Dhanya Skariachan and Kim Coghill)

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By Sai Ishwarbharath B

BENGALURU, Aug 7 (Reuters) - India's Tata Consultancy Services TCS.NS will raise salaries for 80% of its workforce, according to an internal email reviewed by Reuters, weeks after announcing layoffs affecting more than 12,000 employees.

The annual wage hike, which was due in April, comes at a time when India's $283 billion IT industry is grappling with cautious client spending amid weak global demand, sticky inflation, and uncertainty around U.S. trade policy. TCS last month said clients delayed decisions and projects.

"We are pleased to announce compensation revision for all eligible associates in grades up to C3A (assistant consultant) and equivalent, covering 80% of workforce," according to the mail to employees from chief human resource officer Milind Lakkad and CHRO designate Sudeep K on Wednesday.

Employees, ranging from trainees with a few months of experience, to assistant consultants who have worked for more than a decade, will be eligible for the wage revision.

However, the mail did not share any details about the revisions for senior-level staff that form the rest 20% of the workforce.

"We can confirm that we will be issuing wage hikes to around 80% of our employees effective 1st September 2025," the Tata Group company said in an email to Reuters, but did not give other details.

The April annual hikes were delayed after the Mumbai-based company cited uncertain business environment. In June, the company's attrition level reaching a two-year high of 13.8%.

(Reporting by Sai Ishwarbharath B; Editing by Harikrishnan Nair)

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By Haripriya Suresh

BENGALURU, July 27 (Reuters) - India's largest IT services provider Tata Consultancy Services TCS.NS will reduce its workforce by 2% in its 2026 financial year, primarily affecting middle and senior management, the company said on Sunday.

The company is retraining and redeploying staff as it enters new markets, invests in new technology and deploys AI, but about 12,200 jobs will be cut as part of the process, it said.

"This transition is being planned with due care to ensure there is no impact on service delivery to our clients," the company added.

India's $283 billion IT sector has had to contend with clients holding back non-essential technology spending because of weak demand, persistent inflation and lingering uncertainty over U.S. trade policies.

TCS Chief Executive K Krithivasan said this month that there were delays in client decision-making and project starts.

(Reporting by Haripriya Suresh
Editing by David Goodman)

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BENGALURU, July 23 (Reuters) - India's Infosys INFY.NS narrowed its forecast for the current fiscal year on Wednesday, after posting bigger-than-expected first-quarter revenue on a boost from Europe market.

The Bengaluru-based firm changed its annual forecast to 1%-3% from the flat-to-up-3% range announced in the previous quarter.

Analysts were largely expecting the firm to lift the bottom end of the range to 1%.

The company's consolidated sales rose 7.5% year-on-year to 422.79 billion rupees ($4.89 billion) in the June quarter.

Analysts, on average, expected 418.06 billion rupees, as per data compiled by LSEG.

($1 = 86.3880 Indian rupees)

(Reporting by Sai Ishwarbharath B ; Editing by Nivedita Bhattacharjee )

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Adds analysts comments in paragraph 7 and 8, stock details in paragraph 3

July 18 (Reuters) - India's Wipro WIPR.NS rose as much as 4% on Friday after the country's fourth-largest IT firm reported better-than-expected quarterly earnings, driven by improved client spending in segments of its Americas business.

At least six brokerages upgraded Wipro's stock after the company posted a 0.8% rise in first-quarter revenue and an 11% jump in net profit, both topping analysts' average estimates, according to LSEG data.

Data also showed that at least 10 brokerages raised their price targets on the stock, which was the top gainer on the benchmark Nifty 50 index and the IT index .NIFTYIT early on Friday. The blue-chip index and the IT index were both down 0.6% and 0.2%, respectively.

India's fourth-largest IT company said it expects revenue for the September quarter to be in the range of $2.56 billion and $2.61 billion, ranging between a drop of 1% and a rise of 1%, in line with what analysts were expecting.

Analysts at Morgan Stanley said strong large deal wins at Wipro "bode well" for growth in the second half of the fiscal year, while those at Investec said deal wins were the "big highlight of the quarter," and were the highest in more-than 13 quarters.

Wipro's deal wins rose to $5 billion in the quarter, up from $3.3 billion a year earlier.

"More importantly, these large deals are concentrated among Wipro's top clients, which implies greater wallet share," Morgan Stanley analysts said in a note.

Wipro's quarterly performance stood in contrast to rivals Tata Consultancy Services TCS.NS and HCLTech HCLT.NS, which reported weaker revenue for the same period.

TCS and Infosys INFY.NS shares were up 0.1%, while HCLTech shares were down 0.8% on Friday.

(Reporting by Manvi Pant; Editing by Chandini Monnappa and Nivedita Bhattacharjee)

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BENGALURU, July 16 (Reuters) - The demand outlook for India's $283-billion IT sector remains uncertain due to U.S. tariff risks and global geopolitical factors, a senior Wipro WIPR.NS executive said on Wednesday.

"Customers are getting acclimatised to living in a world that is uncertain," said Rishad Premji, executive chairman of the country's fourth-largest IT firm by revenue.

"The (overall) environment remains uncertain. It has not gotten any worse but not gotten significantly better at the moment."

He was speaking at the company's annual shareholder meeting ahead of first-quarter results scheduled to be announced on Thursday.

Clients have tightened non-essential or discretionary spending and are focussing more on cost-cutting projects enabled through tech, said Premji.

Uncertainty around U.S. tariffs have dashed hopes of IT companies of a revival in client confidence and spending in its biggest market. A survey in May showed two in five tech executives had deferred discretionary projects.

Premji, however, said green shoots had emerged in pockets in terms of discretionary spending.

Indian IT companies have so far reported tepid earnings for the June quarter.

Last Thursday, bellwether Tata Consultancy Services TCS.NS missed quarterly revenue estimates as its clients stayed cautious about non-essential spending amid U.S. tariff-related uncertainty.

TCS CEO K Krithivasan said delays in decision-making and project starts "intensified" in the June quarter, adding that it was "too early" to predict when the growth would resume.

HCLTech HCLT.NS reported June-quarter profit below analyst estimates on Monday and lowered its operating margin forecast for fiscal 2026.

(Reporting by Sai Ishwarbharath B; Editing by Subhranshu Sahu)

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** India's top IT services exporter TCS TCS.NS missed its quarterly revenue estimates with sales in four out of its six verticals falling on-year

** Shares ~2% lower in early trade

** At least 12 analysts slash PT on "buy"-rated stock, taking median target to 3,780 rupees from 3,783 rupees last month - data compiled by LSEG

WEAK START TO FY26

** Jefferies ("hold," PT: 3,480 rupees) says the results are a weak start to FY26 and suggest that demand environment continues to be challenged with pressures on discretionary spends

** JP Morgan ("neutral," PT: 3,850 rupees) says revenue was at the low end of analysts' estimates, suggesting either a very weak demand environment or a TCS-specific problem that the rest of the earnings season will answer

** Morningstar (PT: 3,030 rupees) says it attributes the underwhelming performance primarily to near-term economic uncertainty

** Brokerage adds that unlike U.S. peer Accenture ACN.N, TCS serves fewer high-profile Fortune 100 names, meaning its customer base is less risk tolerant

** BOBCaps ("hold," PT: 3,304 rupees) says results weakness intensified for TCS even though the narrative was that there was no deterioration beyond what Q4 results indicated

(Reporting by Kashish Tandon in Bengaluru)

((kashish.tandon@thomsonreuters.com; Mobile: +91 8800437922))

July 10 (Reuters) - Tata Consultancy Services Ltd TCS.NS:

• TCS Q1 ORDER BOOK AT $9.4 BILLION

• TCS - CONTINUED GLOBAL MACRO-ECONOMIC, GEO-POLITICAL UNCERTAINTIES CAUSED A DEMAND CONTRACTION

Source text: [ID:]

Further company coverage: TCS.NS

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June 20 (Reuters) - Tata Consultancy Services Ltd TCS.NS:

• TCS - SETS UP TWO NEW AUTOMOTIVE DELIVERY CENTRES IN GERMANY

Source text: [ID:]

Further company coverage: TCS.NS

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June 19 (Reuters) - Tata Consultancy Services Ltd TCS.NS:

• TCS INDEPENDENT DIRECTOR MISTRY: MARKS AND SPENCER INCIDENT UNDER REVIEW, UNDER INVESTIGATION BY CUSTOMER

• TCS INDEPENDENT DIRECTOR MISTRY: NO TCS SYSTEMS, USERS WERE COMPROMISED, NONE OF OUR OTHER CUSTOMERS IMPACTED

• TCS INDEPENDENT DIRECTOR MISTRY: PURVIEW OF MARKS AND SPENCER INCIDENT INVESTIGATION DOES NOT INCLUDE CO

• TCS INDEPENDENT DIRECTOR MISTRY SPEAKING AT COMPANY AGM

Further company coverage: TCS.NS

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June 16 (Reuters) - Tata Consultancy Services Ltd TCS.NS:

• COUNCIL OF EUROPE DEVELOPMENT BANK PARTNERS WITH TCS

• PARTNERSHIP TO TRANSFORM RECONCILIATION PROCESSES

Source text: ID:nnAZN3ZGNGQ

Further company coverage: TCS.NS

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June 3 (Reuters) - Tata Consultancy Services Ltd TCS.NS:

• VIRGIN ATLANTIC AND TCS EXTEND TWO-DECADE PARTNERSHIP

• PARTNERSHIP TO MODERNIZE AIRLINE OPERATIONS WITH AI-LED SOLUTIONS

Source text: ID:nnAZN3XJP2Q

Further company coverage: TCS.NS

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By Haripriya Suresh and Sai Ishwarbharath B

BENGALURU, June 2 (Reuters) - Infosys INFY.NS CEO Salil Parekh's compensation rose 21.7% to 806.2 million rupees ($9.44 million), the company said in its annual report on Monday, making him one of the highest-paid Indian IT chiefs currently in office.

Parekh, the longest-serving non-founder CEO at the IT company, earned a fixed salary of 79.4 million rupees and bonuses of 231.8 million rupees.

The largest portion, 495 million rupees, resulted from the chief executive of India's No. 2 IT services firm exercising his stock options.

In comparison, Parekh earned $7.9 million in 2024 and $6.76 million in 2023, with the rise in pay, mainly due to a greater number of stock options exercised during the year.

For the financial year 2025, Infosys reported a revenue growth of 4.2% in constant currency terms, falling short of its forecast of 4.5%-5%. For the current fiscal year, it forecast a flat to 3% growth in revenue, signalling a weaker business environment.

India's $283-billion IT sector is facing another year of slowing growth, partly due to the U.S. tariff policies, which complicate forecasting market conditions in key markets and client segments.

"Majority of Infosys revenue is from the U.S. and other global markets. The compensation is in line and consistent with what companies of this scale and size pay globally. Boards of Indian tech companies are indeed aware and need their leaders to be retained and paid appropriately in this challenging environment," said K Sudarshan, managing director at executive search firm EMA Partners.

K Krithivasan, CEO of Infosys' larger rival Tata Consultancy Services TCS.NS earned $3.11 million, and smaller rival Wipro's WIPR.NS CEO Srinivas Pallia earned $6.28 million, according to their latest annual report.

Infosys is one of the two among India's top five IT companies that have retained their CEO at the helm over the last 18–24 months, with HCLTech being the other.

($1 = 85.3600 Indian rupees)

(Reporting by Haripriya Suresh and Sai Ishwarbharath B; Editing by Tasim Zhaid)

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The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Shritama Bose

MUMBAI, May 29 (Reuters Breakingviews) - India’s largest-ever private credit deal is a prime example of investors having capital burning a hole in their pockets. Struggling conglomerate Shapoorji Pallonji Group has just sold a 298 billion rupees ($3.5 billion) bond to a group including BlackRock BLK.N, Ares ARES.N and Pimco. Lending to financially challenged companies is where the fast-growing industry cut its teeth. But with around a quarter of assets in private credit providers’ portfolios sitting idle, per BNP Paribas, the hoops all sides are jumping through to get this deal done smacks of desperation.

For starters, it’s a zero-coupon bond, meaning the issuer pays no interest. That’s useful for SP Group. Granted, operating profit at the group's flagship company covers twice its interest bill for the six months to the end of September. That’s a big improvement from four years ago, per rating agency ICRA. But last year, the state-backed Power Finance Corporation declined its borrowing request, and rates on another unit's bonds rose after it missed deadlines for asset sales.

The bondholders make their money – a 19.75% yield – by buying the debt at a discount to face value and holding it until it matures in three years’ time. They don’t seem overly confident the borrower will stay out of trouble, as the terms include not one, not two, but three different layers of protection.

First, SP Group must pay back part of the debt if it sells certain assets. Second, its real estate business is providing a 100% guarantee on the paper. Even that’s not enough. As a third level of defence for its creditors, the issuer has agreed to stump up as collateral 9% of Tata Sons, around half its holdings in the company which owns large stakes in Tata Consultancy Services TCS.NS, Tata Motors TAMO.NS and more.

That pledged chunk could be worth between $8 billion and almost $19 billion, based on research by analysts at wealth manager Spark last year that factors in how much of a discount is applied to the unlisted company’s various public investments.

Trouble is, it’s not certain that Pimco and partners, which also include Farallon Capital Management and Deutsche Bank DBKGn.DE, would be able to get their hands on SP Group’s portion: Tata Trusts, which is Tata Sons’ controlling shareholder, insists the stock is not "freely transferable". Despite their evident trepidation at SP Group's ability to repay them, the bondholders will be hoping they won’t need to put that to the test.

Follow Shritama Bose on LinkedIn and X.

CONTEXT NEWS

Indian conglomerate Shapoorji Pallonji Group has issued an unrated and unlisted 298 billion rupees ($3.5 billion) three-year zero-coupon bond to companies including BlackRock, Pimco, Davidson Kempner Capital Management, Farallon Capital Management, Ares Management and Deutsche Bank, which also arranged the deal.

The deal offers a yield of 19.75% by being priced at a discount to face value. It is the largest private credit transaction in India, IFR reported on May 16, citing market sources.

(Editing by Antony Currie; Production by Ujjaini Dutta)

((For previous columns by the author, Reuters customers can click on BOSE/[email protected]))

May 21 (Reuters) - Tata Consultancy Services Ltd TCS.NS:

• RECEIVES 29.03 BILLION RUPEES ORDER FROM BSNL FOR 4G NETWORK

Source text: ID:nBSE2K2Ths

Further company coverage: TCS.NS

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