New Labor Codes Hit Tech Giants: TCS, Infosys, HCLTech Face ₹4,373 Cr Loss in Q3

• TCS, Infosys, and HCLTech collectively incurred over ₹4,373 crore in losses during Q3 due to new labor code implementation.
• Infosys reported ₹1,289 crore in expenses, TCS ₹2,128 crore, and HCLTech ₹956 crore for labor code adjustments.
• Expenses primarily stem from increased gratuity and leave liability for past service costs.
• Infosys' operating margin dropped to 18.4% from 21% in the previous quarter, while TCS and HCLTech maintained or improved margins.
• Brokerage firm Jefferies predicts ongoing margin pressure for IT companies in FY27-28 due to these labor codes and other factors.

Why It Matters: New labor codes led to significant Q3 losses for major IT firms, with future margin pressure anticipated.