Why Elon Musk’s Cost-Cutting Measures at DOGE Will Wipro, Infosys, and TCS

Top IT companies in India, including TCS, Wipro, and Infosys are staring at lower revenues in 2026 due to reduced spending in the US, Times of India reported. Analysts believe that the report from global tech firm Accenture points to cautioned IT spending due to Elon Musk’s cost-cutting measures in the US and slower decision making will have an impact on India’s tech industry.

DOGE Cost-Cutting Impact on IT sector

Analysts say that the 2026 fiscal year may not yield the expected surge. They say Indian IT companies are already struggling and they still face a prolonged recovery process. This pessimistic outlook comes soon after global IT company Accenture released its most recent quarterly report. The report underscored continuing weaknesses underlying overall demand and discretionary spending by government entities in the US.

Accenture’s performance is an important indicator for India’s IT industry. In its report, the tech firm reported that reduced discretionary project spending and the absence of client budget increments will affect business between tech companies and government agencies.

According to Accenture CEO Julie Spellman Sweet, these reductions in IT spending are as a result of initiatives introduced by the Elon Musk-led Department of Government Efficiency (DOGE) under the Trump Administration.

“Federal represented approximately 8% of our global revenue and 16% of our Americas revenue in FY 2024. As you know, the new administration has a clear goal to run the federal government more efficiently. During this process, many new procurement actions have slowed, which is negatively impacting our sales and revenue,” Sweet sait during a conference call with Wall Street analysts.

Impact of Global Trade War

Accenture’s report does not stop at highlighting the impact that DOGE cost-cutting will have on Wipro and Infosys, it also discusses the rising global trade wars and their potential to delay recovery of the IT sector. New tariffs introduced by US President Donald Trump have escalated trade tensions globally, raising concerns over a potential economic slowdown in the American market.

The US is an important market for Indian tech firms. A slowdown in its economy means reduced demand for tech services and products.

“Whatever has happened in the last two months has created a higher level of uncertainty in terms of how the first half of fiscal 2026 will pan out and what impact it will have on the FY26 recovery rate,” Amit Chandra, Deputy VP at HDFC Securities said.

Analysts at Kotak Institutional Equities project that in 2026, India’s top tech companies will generate less revenue from big deals.

“The softening demand recovery and weak mega deal flow in fiscal 2025 will result in lower incremental revenue from mega deals in fiscal 2026 for Indian Tier-1 IT. Companies will also face net headwinds from early stages of gen AI adoption,” the Analysts said.

The report by Accenture also indicated that the uncertainties created by the global trade tensions have pushed clients across sectors to adopt a wait-and-see attitude towards spending. This is hurting sectors such as healthcare, and banking, financial services, and insurance, which had started showing signs of recovery.

Marginal Growth

India’s IT index has recorded a 15.3% drop this year alone, Times of India reported. This drop points to the Index’s worst performance quarter since June 2022. Leading tech companies like HCL Tech, Wipro, Infosys, and TCS registered losses of between 11.2% and 18.%. But research by Citi shows that India’s IT sector could still register marginal growth in 2026.

According to the research, IT companies have limited exposure, which may increase their competitive intensity in other market segments, leading to a 4% growth in revenue.