New Labor Rules Hit TCS, HCL Tech Q3 Profits: ₹3,400 Cr One-Off Costs for TCS

• New labor codes led to increased overhead expenses for companies in India starting December quarter.
• TCS reported an additional charge of ₹2,128 crore due to new labor codes, impacting its Q3 net profit by 11.7% sequentially.
• TCS also incurred ₹253 crore for restructuring and ₹1,010 crore for legal claims, totaling ₹3,400 crore in one-off costs.
• HCL Technologies faced an exceptional charge of ₹956 crore, causing a 4% sequential decline in net profit.
• The new codes redefine wages, increasing basic pay and statutory contributions like provident fund and gratuity, leading to higher employee costs.

Why It Matters: New labor codes significantly impacted TCS and HCL Tech's Q3 profits through increased employee-related costs.