Employees at Tata Consultancy Services have alleged that their monthly salaries declined after the company’s latest appraisal cycle despite the IT major announcing average salary hikes of 5% to 8% for FY26.
The complaints surfaced days after TCS rolled out revised compensation structures linked to India’s upcoming Labour Codes and disclosed in its annual report that CEO K Krithivasan earned more than ₹28 crore during the financial year.
According to employee accounts cited by Moneycontrol, some workers in lower performance bands reported reduced monthly payouts after changes to salary components and variable pay structures.
The concerns have triggered fresh debate over compensation transparency, appraisal fairness and workplace policies at India’s largest IT services company.
Employees report lower take-home pay after revisions
TCS implemented its annual appraisal process using performance bands including A+, A, B and C.
According to Moneycontrol, employees in the highest-rated A+ category reportedly received increments ranging between 9% and 13%, while employees in the A band said their hikes ranged from 5% to 9%.
However, workers in lower performance bands described a different outcome.
Reported employee claims included:
• B-band employees receiving increments between 1% and 3.5%
• Some C-band employees reporting lower overall salary figures after revision
• Monthly variable pay allegedly reduced or shifted to quarterly and annual payout cycles
One employee from the C3A grade told Moneycontrol that their salary had “actually decreased by ₹3000” after the appraisal process.
Another employee quoted in the report claimed annual compensation had fallen by between ₹1,000 and ₹10,000 despite receiving an appraisal letter.
Several employees also alleged that changes to variable pay structures affected their regular monthly earnings even where annual compensation technically increased.
Return-to-office concerns add to employee frustration
The appraisal cycle has also intensified discussion around TCS’ work-from-office expectations.
According to employee claims reported by Moneycontrol, some performance-linked bonuses and payouts are now being influenced by office attendance compliance.
One employee told the publication that “performance pay and bonus both are now calculated on the basis of WFO compliance”.
TCS has not publicly confirmed any direct linkage between office attendance and bonus calculations beyond the employee accounts cited in the report.
The company has steadily increased pressure on employees to return to office over the past year as major Indian IT firms push for tighter workplace attendance and operational discipline.
TCS says changes are linked to labour code compliance
TCS defended the revised salary structure, saying the changes were part of a broader exercise to align compensation systems with India’s new Labour Codes.
In a statement quoted by Moneycontrol, the company said the revised structure was guided by three principles:
• Compliance with new Labour Codes
• Standardisation of wage structures across the India workforce
• Protection of employee take-home salary while allowing tax efficiency flexibility
TCS also said it had maintained a long-standing record of providing annual increments to employees.
The company had earlier disclosed that it set aside ₹2,128 crore as a one-time expense during the October-December quarter to align compensation structures with the labour code framework.
CEO compensation rises in FY26
The employee complaints emerged alongside fresh disclosures on executive compensation in TCS’ annual report.
The filing showed K Krithivasan’s remuneration increased 6.3% year-on-year to more than ₹28 crore in FY26.
According to the report, his compensation included:
• More than ₹1.67 crore in salary
• Around ₹1.43 crore in benefits and allowances
• ₹25 crore in commissions
The annual report stated that Krithivasan’s remuneration stood at nearly 333 times the median employee salary at the company.
The filing also disclosed compensation details for Aarthi Subramanian, who became executive director and chief operating officer in May 2025.
She received:
• Nearly ₹1.51 crore in salary
• About ₹1.83 crore in benefits and allowances
• ₹15 crore in commission payments
AI investments become a larger strategic focus
Beyond compensation issues, the annual report also highlighted TCS’ growing focus on enterprise AI systems and infrastructure.
Chairman N Chandrasekaran said enterprises would increasingly require integrated AI operating systems capable of managing infrastructure, governance, AI agents and data together.
Krithivasan added that businesses were looking for AI systems capable of scaling securely across day-to-day operations while maintaining governance and auditability.
The company said future priorities would include:
• AI infrastructure
• Industry-specific AI platforms
• Partnerships with hyperscalers
• Sovereign AI systems
The comments reflect a wider shift across the IT services industry, where companies are balancing workforce management pressures with rising investment in AI-led transformation projects.
For TCS employees, however, the immediate concern remains simpler: whether annual appraisals are translating into higher monthly salaries in practice.