3 Oct 2025 : A week from now, Tata Consultancy Services Ltd. will become the first Indian IT firm to face investors after an H-1B sticker shock and AI layoffs.
TCS will report its second-quarter earnings on Thursday.
India’s largest IT services firm is poised for a decline in revenue growth on a constant currency basis, amid an ongoing slowdown due to weak spending from its overseas clients, according to Bloomberg. It is in the midst of mass layoffs to trim its global workforce by 2% — a severance package has been announced for those who cannot keep up with the age of AI.
Its localisation levels and staffing plans will be in focus in light of the recent US visa moves, according to Citi analysts.
IT services firms are assessing the impact of Trump raising the fee for the H-1B visa to $100,000. TCS is the second-heaviest user of the visa type as it deploys thousands of engineers across client offices in America. While TCS and peers have been reducing their dependence on the visa in recent years, the added cost is expected to dent profits.
The move may reduce earnings by between 4% and 13% across the sector, as the fee will entirely offset operating profits per employee on the visa, while a shift away from H-1B users will lead to a talent supply crunch and drive up wages, analysts at Jefferies said. Crisil Intelligence analysts expect the new visa costs to be passed on to clients, limiting the impact on margins to just 10-20 basis points.
The uncertainty has pushed the NSE Nifty IT index 7.3% lower since Trump’s Sept. 19 announcement. The IT services sector was already dealing with tighter technology budgets at large US corporations, slowing discretionary spending and the ceding of market share to global capability centres.
Summary:
Tata Consultancy Services becomes the first IT giant among peers to address investors, tackling challenges from H-1B visa uncertainty and AI-driven layoffs affecting global workforce stability.