CHENNAI: Tata Consultancy Services (TCS), India’s largest IT services company, has announced that it will roll out salary hikes to nearly 80% of its employees starting September 1, 2025. The hike will apply to employees up to the C3A grade, covering freshers and mid-level professionals with up to a decade of experience.
The hike announcement comes amid a broader restructuring at TCS. The company is reportedly laying off around 12,000 mid- and senior-level employees — about 2% of its global workforce — as it shifts its focus towards younger, tech-savvy talent aligned with new technologies like artificial intelligence and cloud computing.
The announcement, according to reports, made via an internal email from Chief Human Resources Officer Milind Lakkad and CHRO-designate K Sudeep, comes after a five-month delay in the annual appraisal cycle, which typically takes place in April. The communication thanked employees for their “dedication and hard work,” without disclosing the exact percentage of the salary hike.
Last year, TCS had given salary increases in the range of 4.5% to 7%, with high performers receiving double-digit increments. This year’s raises are expected to be in a similar range, although no official figures have been released.
According to internal sources, the salary hike is part of the company’s strategy to retain and motivate its junior and mid-level employees while streamlining higher-cost resources. However, the move has triggered mixed reactions within the company, with some employees questioning the lack of clarity about salary dues for the April–August period and the overlap with ongoing job cuts.
The Indian IT sector has been under pressure in recent quarters due to global macroeconomic headwinds, reduced client spending, and uncertainty in export markets. In the June quarter, TCS reported a 3.1% year-on-year decline in constant currency revenue, while voluntary attrition rose to 13.8%.
Despite these challenges, TCS’s move to resume salary hikes sets it apart from some of its peers. Companies like Infosys and Cognizant have either deferred or frozen hikes in response to weak global demand and cost concerns.
Industry watchers view the dual approach of selective hikes and targeted layoffs as part of TCS’s larger effort to build a “future-ready” workforce capable of navigating an increasingly digital and competitive environment.