The world of Indian IT is holding its breath as Tata Consultancy Services Ltd. (TCS), the country’s largest information technology services firm, prepares to face investors on October 9, 2025. This isn’t just another earnings call. TCS is stepping into the spotlight as the first Indian IT giant to report quarterly results after a seismic shake-up in U.S. immigration policy and a wave of AI-driven layoffs, according to Bloomberg. The company’s performance will be closely scrutinized, not just for its numbers, but for the signals it sends to the entire sector navigating a period of unprecedented uncertainty.
The catalyst for this anxiety? A dramatic increase in the fee for the H-1B work visa, announced by former U.S. President Donald Trump on September 19, 2025. The fee hike—now a staggering $100,000 per visa—has sent shockwaves through the IT services industry, especially for firms like TCS that rely heavily on deploying engineers to client offices in the United States. As reported by Bloomberg, TCS is the second-heaviest user of H-1B visas, with thousands of its employees working in America. While the company and its peers have been gradually reducing their reliance on this visa category, the sudden spike in costs is expected to put a serious dent in profits.
According to analysts at Jefferies, the increased visa fee could slash earnings across the sector by anywhere from 4% to 13%. For many IT companies, the fee will entirely offset operating profits per employee on the visa. The ripple effects don’t stop there. As firms shift away from hiring H-1B visa holders, a talent supply crunch is likely to emerge, driving up wages and making it even tougher to staff U.S. projects efficiently. "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," Jefferies analysts told Bloomberg.
It’s not all doom and gloom, though. Some industry watchers, such as Crisil Intelligence, suggest that the increased visa costs could be passed on to clients, limiting the impact on company margins to just 10 to 20 basis points. That’s a small fraction, but in an industry already grappling with shrinking budgets and fierce competition, every sliver of margin matters. As Crisil Intelligence analysts put it, "the new visa costs [are] expected to be passed on to clients, limiting the impact on margins to just 10-20 basis points."
The timing couldn’t be worse for TCS and its peers. The sector is already under pressure from multiple fronts. Major U.S. corporations—long the bread and butter for Indian IT—have tightened their technology budgets, slowing discretionary spending. At the same time, global capability centers are eating into the market share traditionally held by outsourcing giants. The result? Revenue growth for TCS is expected to decline on a constant currency basis, a rare occurrence for a company that has long been a bellwether of India’s economic might.
Investors have reacted swiftly to the changing winds. Since Trump’s September 19 announcement, the NSE Nifty IT index has dropped by 7.3%, reflecting widespread concern about the sector’s prospects. TCS’s own shares have not been immune, tumbling as the market digests the potential impact of visa policy changes, slowing overseas client spending, and the company’s own internal shake-up.
That shake-up comes in the form of mass layoffs. TCS is in the midst of reducing its global workforce by 2%, or about 12,000 employees, by the end of March 2026. The company has announced a severance package for those unable to adapt to the accelerating pace of AI-driven transformation. It’s a stark reminder that even the most established players are not immune to the relentless march of automation and digital innovation. As Bloomberg reports, "TCS is conducting mass layoffs to reduce its global workforce by 2%, with a severance package announced for employees unable to adapt to AI advancements."
For TCS, the upcoming earnings call is about more than just numbers. Analysts and investors will be laser-focused on the company’s localization strategy and staffing plans, especially in light of the new U.S. visa regime. Will TCS double down on hiring locally in the U.S., or will it find new ways to move talent across borders despite the higher costs? According to Citi analysts cited by Bloomberg, "TCS’s localization levels and staffing plans will be in focus in light of the recent US visa moves."
The broader context is equally important. The Indian IT sector has long been a symbol of globalization, leveraging the H-1B visa program to bridge skills gaps and deliver cutting-edge solutions to clients worldwide. But with rising protectionism and the relentless advance of AI, the old playbook is under threat. Companies are being forced to rethink their business models, invest in upskilling, and explore new markets to stay competitive.
For employees, the changes are deeply personal. The H-1B visa has been a ticket to opportunity for thousands of Indian engineers and their families. Now, with the cost of that ticket soaring and the risk of layoffs rising, many are left wondering about their future. The severance packages offered by TCS provide some cushion, but they also underscore the human cost of technological disruption and policy shifts.
Meanwhile, clients of Indian IT firms are watching closely. The prospect of higher costs being passed on to them is unwelcome, especially as they face their own budget constraints and the need to do more with less. Yet the value proposition of Indian IT—cost-effective, high-quality services delivered at scale—remains compelling, even as the industry navigates choppy waters.
As TCS prepares to report its second-quarter earnings, the stakes couldn’t be higher. The company’s performance will offer a window into how Indian IT is adapting to a world where visas are harder to get, costs are rising, and AI is reshaping the very nature of work. Will TCS find a way to turn adversity into opportunity, or will it struggle to maintain its edge in a rapidly changing landscape?
One thing is clear: the days of business as usual are over. The coming weeks and months will test the resilience and ingenuity of TCS and its peers. For now, all eyes are on Thursday’s earnings call, where the company’s leaders will be pressed to answer tough questions and chart a course through uncertainty. As the industry recalibrates, the story of TCS may well become a blueprint—or a cautionary tale—for the future of global IT services.