TCS has rolled out its annual salary hike, giving most of its 6 lakh-plus employees a 4.5–7% raise.
The hike, one of the smallest in four years, reflects a slowing business environment affecting the wider IT sector.
The company plans to lay off over 12,000 employees during the ongoing financial year.
Tata Consultancy Services (TCS) has reportedly rolled out its annual salary hike on Monday for a majority of its over 6 lakh employees. However, most received an average raise of 4.5–7%, similar to what they were awarded for the financial year 2023–24 (FY24). The hike comes as the Tata Group company is preparing to lay off over 12,000 workers, or about 2% of its workforce.
According to the Economic Times (ET), this is among the smallest salary hikes offered in the past four years, reflecting the impact of a slowing business environment on both the IT industry and TCS’s financials. Average increments were also in the 4.5–7% range for FY24, compared with 6–9% in FY23 and 10.5% in FY22. High performers, however, are expected to receive pay rises above 10%.
Typically, TCS rolls out increments in April, but the latest round will take effect from 1 September, covering employees from fresher level up to grade C3A, mainly junior and mid-level staff. Senior employees in higher bands (C3B, C4, C5) are not included in this cycle.
ET claimed that the hikes will not be paid retrospectively and will be reflected in employees’ September salaries.
In August, an email by former CHRO Milind Lakkad and new CHRO K Sudeep first announced the much-awaited wage hike.
“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 1 September 2025. We would like to thank each one of you for your dedication and hard work, as we build the future of TCS together,” it said.
TCS CEO K Krithivasan, at the post-earnings press conference in June, said they had seen delays in decision-making and project launches, particularly for discretionary investments, and this trend had not only persisted but intensified this quarter. Global businesses are also grappling with geopolitical conflicts, economic uncertainty, and supply chain disruptions, he noted.
Consequently, in the first quarter, TCS’s revenue in constant currency terms fell 3.1%, while net profit grew just 6% year-on-year to ₹12,760 crore.
A few days later, the company unveiled a “future-ready” strategy, outlining plans to invest in emerging technologies, expand into new markets, deploy AI at scale for clients and internally, deepen partnerships, build next-generation infrastructure, and realign its workforce model.
TCS added it would also release associates whose deployment is no longer feasible, a move expected to affect mainly middle and senior levels over the course of the ongoing financial year.
