Image Source: Times of India
India’s largest IT services firm, Tata Consultancy Services (TCS), has announced a long-awaited salary hike for 80% of its workforce, effective September 1, 2025. The move comes after a five-month delay in the annual appraisal cycle, which typically takes place in April. The announcement was made via an internal email from Chief Human Resources Officer Milind Lakkad and CHRO-designate K Sudeep, and has sparked both relief and controversy across the company’s sprawling employee base.
Who’s Getting the Raise?
The wage hike will apply to employees in grades up to C3A—this includes freshers, junior associates, and mid-level professionals with up to a decade of experience. According to the internal communication, the revision covers approximately 80% of TCS’s global workforce. However, the company has not disclosed the exact percentage of the hike or whether back pay will be issued for the April–August period.
Employees eligible for the raise range from trainees with just a few months of experience to assistant consultants who have been with the company for over ten years. The remaining 20%—largely senior-level staff—were not mentioned in the announcement, leaving questions about their compensation unresolved.
Why the Delay?
TCS had postponed its annual wage hike earlier this year, citing an “uncertain business environment.” The company’s Q1 results reflected weak global demand, cautious client spending, and macroeconomic headwinds including sticky inflation and trade policy uncertainty in key markets like the US and Europe.
Attrition also surged to 13.8% in the June quarter, a two-year high, further pressuring the company to retain talent. The delay had left many employees frustrated, especially as peers like Infosys and Cognizant either froze or deferred their own salary hikes.
Layoffs and Restructuring: A Mixed Message?
The announcement of salary hikes comes just weeks after TCS revealed plans to lay off around 12,000 employees—roughly 2% of its global workforce. The layoffs are part of a broader restructuring strategy aimed at streamlining operations and building a “future-ready” organization focused on AI, cloud computing, and digital transformation.
The dual messaging—raises for some, pink slips for others—has triggered mixed reactions. While junior employees welcomed the hike, others questioned the timing and transparency of the move. Labour unions, including the Centre of Indian Trade Unions (CITU), have announced nationwide protests outside TCS offices on August 19. The Karnataka State IT/ITeS Employees Union (KITU) has also filed an industrial dispute case against the company, accusing it of illegal mass retrenchment.
What TCS Says
In a statement to Reuters, TCS confirmed the wage hike but declined to provide further details. “We are pleased to announce compensation revision for all eligible associates in grades up to C3A and equivalent, covering 80% of our workforce,” the email read.
The company emphasized its commitment to recognizing employee contributions and adapting to evolving business needs. However, it remains tight-lipped about the quantum of the hike and the fate of senior-level staff.
Industry Impact
TCS’s decision to resume salary hikes sets it apart from many of its peers in India’s $283 billion IT industry. With global demand still tepid and clients delaying projects, most IT firms are tightening their belts. TCS’s move could signal cautious optimism—or a strategic gamble to retain talent while reshaping its workforce.
Industry analysts suggest that the company is betting on younger, tech-savvy employees to drive its next phase of growth. The restructuring, layoffs, and selective hikes are all part of a larger effort to align with emerging technologies and market demands.
Sources: India TV News, Indian Express, Economic Times
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