Tata Consultancy Services has rolled out salary hikes of 6-8% for employees in India, even as workers across the company continue to report lower variable pay, tighter compensation policies and growing pressure linked to AI-led productivity targets.
The hikes, effective from April 2026, mark a return to TCS’s regular appraisal cycle after delays last year caused by weak global demand and macroeconomic uncertainty. Top-rated employees received increments of more than 10%, while lower-rated staff saw hikes of around 2-3%.
At the same time, employees across online forums, Reddit discussions and workplace platforms have complained that overall compensation has effectively shrunk because of reduced quarterly variable pay and stricter performance-linked payouts.
A report by People Matters said more than 300 senior leaders exited TCS in the past eight months amid layoffs, lower bonuses and AI-led restructuring inside the company. The report said some senior executives received “less than 10%” of expected variable pay during the past two years.
The concerns are emerging even as TCS continues to report stable profits and revenue. TCS has also repeatedly highlighted growing enterprise demand for artificial intelligence services and said AI has become central to client conversations.
In its FY26 annual report, TCS said annual salary increases for junior and mid-level employees ranged between 4.5% and 7% in India, while overseas employees received 1-6% hikes. The company added that variable pay remains linked to “organisation performance and individual utilisation”.
Meanwhile, TCS has reduced its workforce by more than 23,000 employees over the last financial year, bringing total headcount down to about 5.84 lakh employees.
During the same period, CEO K Krithivasan’s remuneration rose 6.3% to Rs 28.1 crore, including Rs 25 crore in commission. His compensation stood at more than 332 times the median employee salary, according to the company’s annual report.
Industry analysts say the shift reflects broader changes across India’s IT sector, where companies are using automation and AI tools to protect margins during slower global technology spending.