TCS Wage Hikes: Who is getting a hike?
The wage increases will cover junior and mid-level employees, which the company defines as up to grade C3A and equivalent. These employees make up about 80% of the company’s workforce.
In an internal email sent to staff on Wednesday, TCS CHRO Milind Lakkad and CHRO Designate K Sudeep wrote, “We are pleased to announce a compensation revision for all eligible associates in grades upto C3A and equivalent, covering 80% of our workforce. This will be effective September 1, 2025.”
The email added, “We would like to thank each one of you for your dedication and hard work, as we build the future of TCS together.”
Last year’s hikes ranged from 4.5% to 7%
In the previous cycle, TCS offered salary hikes of 4.5% to 7%, with high performers receiving double-digit raises. The company has not revealed the average increment for this year.
The current round of hikes comes amid caution across the IT industry. Indian IT firms are facing muted revenue growth, delayed decision-making by clients, and concerns around the impact of tariffs and AI-led changes.The company did not disclose the average hike. Last year, salary increases ranged from 4.5% to 7%, with top performers receiving double-digit increments.In a statement to the media, TCS confirmed: “We can confirm that we will be issuing wage hikes to around 80% of our employees effective September 1.”
Who is being laid off?
The remaining 20% of the workforce, mainly comprising mid to senior-level employees, is outside the scope of the current hike. Among them, around 12,000 people, roughly 2% of the global headcount, will lose their jobs in 2025 as part of a strategic overhaul.
TCS had earlier said, “TCS is on a journey to become a future-ready organisation. 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 added, “Towards this, a number of reskilling and redeployment initiatives have been underway. As part of this journey, we 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 the senior grades, over the course of the year.”
TCS Salary Hike: Context behind the decision
The wage hikes come after a delay in the company’s regular April increment cycle. In its April and June quarter updates, TCS had indicated uncertainty around salary increases due to macroeconomic conditions and weak demand from key markets.
Revenue for the June quarter dropped 3.1% year-on-year in constant currency and fell 3.3% sequentially. The company cited delayed client decisions, geopolitical uncertainty, and the end of the BSNL deal as key factors.
TCS’s move stands out as several other IT firms have either postponed or frozen increments. Meanwhile, Infosys CEO Salil Parekh, when asked about wage hikes, said, “We concluded our compensation increases for Q4 and Q1 of the last fiscal year… Now that this cycle is complete, we are beginning to evaluate the timing for the next round—as we do after every cycle.”
What this means for TCS?
With 80% of the workforce set to receive salary hikes and a sharp 2% cut in headcount, TCS appears to be restructuring around fresh and mid-level talent, while phasing out more experienced roles as part of a cost and strategy shift. The move signals how India’s top IT firms are navigating global slowdown, AI disruption, and pressure on margins.
IT industry taking cautious approach
Infosys CEO Salil Parekh, when asked about wage hike timelines, said: “We concluded our compensation increases for Q4 and Q1 of the last fiscal year… Now that this cycle is complete, we are beginning to evaluate the timing for the next round—as we do after every cycle. During Covid, the standard cycle was disrupted, leading to two increases over 18 months. There are no changes planned. We will stick with our existing process and announce the next cycle at the right time.”
The mixed signals from India’s top IT players point to a sector in transition, as firms balance talent retention with cost pressures and prepare for shifts driven by AI and global market changes.
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