New Labor Codes Hit IT Giants: TCS, Infosys, HCLTech Face Rs 4,373 Cr Extra Expense

• TCS, Infosys, and HCLTech incurred an additional INR 4,373 crore in expenses in Q3 FY25 due to new labor code implementation.
• Infosys reported an extraordinary expense of INR 1,289 crore, TCS INR 2,128 crore, and HCLTech INR 956 crore, leading to profit declines.
• The new codes mandate basic salary to be at least 50% of CTC, increasing gratuity and PF liabilities for companies.
• Brokerage firms like Jefferies predict ongoing margin pressure and slower senior-level salary growth due to these changes.
• The new labor codes aim to enhance employee benefits, including better wages, social security, and leave policies.

Why It Matters: New labor codes led to significant one-time expenses for IT firms, impacting profits and potentially future salary growth.