TCS, Infosys, Wipro and Other IT Companies Book ₹5,000 Crore Hit from New Labour Codes

India’s largest Information Technology (IT) services companies reported a sharp rise in employee-related expenses in the December 2025 quarter after accounting for changes under the new labour codes.  

5 major firms together recognised close to ₹5,000 crore as one-time charges, linked to statutory employee benefit liabilities. 

What Led to the Additional Provisioning 

The labour codes require companies to use a revised definition of wages while calculating benefits such as gratuity and leave encashment. This change meant firms had to reassess existing obligations for employees who have already completed years of service. The revised liabilities were recognised in full during the quarter. 

Impact Across Leading IT Companies 

The highest charge was reported by Tata Consultancy Services (TCS), which booked ₹2,128 crore as a one-time expense. Infosys reported a charge of ₹1,289 crore, while HCLTech recorded ₹956 crore related to the same regulatory change. 

Other Firms Also Affected 

The impact extended beyond the top three companies. Wipro reported a one-time charge of ₹302 crore, while Tech Mahindra booked ₹272 crore. These amounts were recorded during the same reporting period and stemmed from similar adjustments. 

Accounting Treatment and Timing 

All 5 companies recognised the additional costs in the three months ended December 2025. The provisions relate to past employee service and were booked to align financial statements with the revised statutory requirements. 

Broader Sector Impact 

The effect of the labour code changes has been more visible in the IT sector due to its large workforce and relatively long employee tenure. Any revision to wage-linked benefits results in higher aggregate liabilities for companies with sizeable employee bases. 

Read More:  India’s Tech Hiring Drops 24% at Start of 2026: Xpheno!  

Conclusion 

The new labour codes resulted in a one-time financial adjustment of nearly ₹5,000 crore for India’s leading IT firms. The charges show compliance-driven recalculations of employee benefit liabilities and do not represent ongoing increases in operating costs. 

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