TCS Rolls Out Wage Hikes for 80% Employees Amid Over 12,000 Job Cuts

Tata Consultancy Services (TCS) has announced salary hikes for 80% of its employees, effective from September 1, according to an internal email. The announcement comes just days after the Tata Group company revealed plans to lay off about 2% of its workforce—over 12,000 employees—from its more than 6 lakh-strong headcount in FY26.

As per the internal email seen by Outlook Business, the long-awaited pay increase will apply to junior and mid-level employees, who make up 80% of the company’s workforce.

“We are pleased to announce a compensation revision for all eligible associates in grades up to C3A and equivalent, covering 80% of our workforce. This will be effective from September 1, 2025. We would like to thank each one of you for your dedication and hard work, as we build the future of TCS together,” read the email, sent on Wednesday by outgoing CHRO Milind Lakkad and CHRO-designate K Sudeep.

At TCS, the grade structure begins with trainees at level Y, followed by systems engineers at C1, then C2, C3 (A & B), C4, C5, and senior leadership roles, including CXOs. Employees in the C3 band and above are generally considered part of the senior category.

TCS later confirmed the annual wage hike in a statement to the media.

Notably, TCS typically announces annual wage increments in the first quarter of a financial year. However, this year, it delayed the revision until September, citing macroeconomic conditions and subdued demand.

“We’ve seen delays in decision-making and project starts. This trend, particularly around discretionary investments, has continued and even intensified this quarter. Global businesses have also faced disruptions due to geopolitical conflicts, economic uncertainty, and supply chain issues,” CEO K Krithivasan said during the post-earnings press conference.

In the first quarter, TCS’s revenue in constant currency terms declined by 3.1%. Net profit rose by just 6% year-on-year to ₹12,760 crore.

Days later, the company announced a strategy to make itself “future ready”.

“This includes strategic initiatives on multiple fronts, including investing in new-tech areas, entering new markets, deploying AI at scale for our clients and ourselves, deepening our partnerships, creating next-gen infrastructure, and realigning our workforce model,” the company said.

It added that it “will also be releasing associates from the organisation whose deployment may not be feasible. This will impact about 2% of our global workforce, primarily in the middle and senior grades, over the course of the year.”

This would amount to over 12,000 employees from its total workforce of 6,13,069 as of 30 June 2025.

TCS Meets Karnataka Labour Dept

Meanwhile, company representatives met with the Karnataka Labour Department following complaints filed by the Karnataka IT/ITeS Employees Union (KITU). The union had filed an industrial dispute case against the IT services firm, alleging that employees were being forced to resign.

According to reports, TCS officials Boban Varghese Thomas (General Manager - HR) and Mahesh G.K. (Assistant Manager) attended a meeting with KITU representatives, including General Secretary Suhas Adiga, President VJK Nair, and Secretary Sooraj Nidiyanga.

During the discussion, TCS executives stated they do not recognise KITU and asked whether the union had received any formal complaints from employees affected by layoffs. KITU members cited media coverage but did not provide written complaints.

A senior official from the Karnataka Labour Department told The Economic Times that the union has been asked to submit a list of grievances received from affected employees. The next meeting on the issue is reportedly scheduled for September 8.