By Admin 
New Labor Code: The country’s IT companies like Tata Consultancy Services (TCS), Infosys and HCLTech have suffered a loss of crores of rupees due to new labour. In fact, due to the implementation of the new labor code, these companies have suffered a loss of more than Rs 4,373 crore. With this, there has been a huge decline in the profits of these three largest IT service companies of the country in the third quarter ending December 31.
Recently, on January 14, Infosys, while announcing its December quarter results, mentioned special expenses of Rs 1289 crore (exceptional charge). Actually, this additional expense was incurred on the company due to increase in gratuity and leave liability due to the implementation of the new labor code. Similarly, on January 12, Tata Consultancy Services (TCS) attributed special expenses of Rs 2128 crore and HCLTech Rs 956 crore to the new labor code.
However, despite challenges such as cost or cost increases due to the implementation of the new labor code, TCS managed to maintain its operating margin at 25.2 percent in Q3. HCLTech increased its operating margin to 18.6 percent. Infosys reported an operating margin of 18.4 percent in Q3, which is much lower than 21 percent in the previous quarter. The company said that if there were no costs related to implementing the labor code, the adjusted margin would have been about 21.2 percent.
What is operating margin?
Operating margin measures the profit from core business activities. This includes everything from workers’ salaries to expenses on raw materials. This is the profit before paying tax. Operating margin tells how much profit the company is earning on every Re 1 of sales from its core business. Higher operating margin means that the company is earning more money from its core business, which it can use to repay debt, pay dividends or for company growth.
New labor code came into effect from November
All three companies have said that the new labor code will have little impact on margins in the coming quarters. Company management expects an impact of approximately 10-20 bps due to these changes. Many changes were made in the new Labor Code, which came into force in November 2025, which laid the foundation for ensuring better salaries, safety, social security and better welfare for India’s workforce. Under this, the government abolished 29 labor related laws and in their place four new labor reform laws were implemented.
These four new labor codes implemented many changes like making appointment letter mandatory for the IT/ITes sector, higher basic salary, guaranteed social security benefits based on working hours. In this, it has been said that women will be given the facility to work in night shift in IT companies, so that they also get the opportunity to earn more money.
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