TCS Q3 FY26 profit falls 14% to Rs 10,657 cr; headcount down by over 11,000

In the September quarter, TCS reported a net reduction of 19,755 employees, but indicated that only about 6,000 of these exits were involuntary and linked to restructuring

Mumbai: The country’s largest IT services company TCS on Monday reported 13.91 per cent decline in December quarter net profit at Rs 10,657 crore, hit by one-time impact of the implementation of new labour codes.

The Tata Group company’s net profit was Rs 12,380 crore in the October-December period of FY25 and Rs 12,075 crore in the preceding September quarter, a statement said.

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Implementation of the new labour codes during the quarter led to a “statutory impact” of Rs 2,128 crore, the company said, adding that but for all the one-time impact, its profit would have grown 8.5 per cent to Rs 13,438 crore.

The company, one of the largest private sector employers in the country, disclosed that the overall headcount was down by 11,151 in the three months to December 31, 2025 to 5,82,163 employees.

TCS had announced to lay off around 12,000 people earlier in the year as part of a restructuring exercise. It reported a reduction of 19,755 in the overall staff in September quarter, but hinted that only 6,000 of these were involuntary actions because of the restructuring exercise.

Revenue from operations during the quarter under review increased 4.86 per cent to Rs 67,087 crore from Rs 63,973 crore. Operating profit margin during the quarter was stable at 25.2 per cent when compared with September quarter but higher than 24.5 per cent in the year-ago period, the company statement said.

Its chief executive and managing director K Krithivasan said the growth momentum witnessed in September quarter continued into the next three months as well. He added that the annualised revenues from artificial intelligence have jumped by over 17 per cent to USD 1.8 billion.

The company’s overall new deal wins, captured through the total contract value number, stood at USD 9.3 billion in the December quarter of FY26. Contributions from India to the topline declined by over 34 per cent on-year, leading to the domestic contribution to the overall pie dipping to 6.1 per cent from 9.8 per cent in the year-ago period.

Amid the geopolitical changes, TCS reported North America revenue rising 1.3 per cent on-year, and revenue from the UK declining 3.2 per cent in constant currency terms. The company board recommended a dividend of Rs 57 per share, including a special dividend of Rs 46, at its board meeting on Monday, it said.

The TCS scrip closed 0.86 per cent up at Rs 3,235.70 on the BSE.