TCS rolls out pay hikes for 80% of employees after five-month delay

Tata Consultancy Services (TCS), India's largest IT services company, has announced salary increases ranging from 4.5% to 7% for the majority of its workforce, effective 1 September 2025. This move, confirmed via an internal email reviewed by Reuters, covers approximately 80% of its employees up to grade C3A, representing junior to mid-level staff.

The pay revision comes after a five‑month postponement of its usual annual hike, originally slated for April. TCS cited macroeconomic uncertainty and weak global demand as reasons for the delay. 

According to media reports, this is the lowest hike rate TCS has implemented in four years. Yet, for the affected employees, it brings a measure of welcome relief amid mounting uncertainties in the IT job market. BusinessLine had earlier indicated the salary bump ranges between 4.5% and 7%, with top performers eligible for double‑digit growth. 

The email from CHRO Milind Lakkad and CHRO‑designate K Sudeep addressed all grades up to C3A, encompassing freshers through assistant consultant roles with over a decade of experience. 

These salary hikes are occurring alongside a major strategic realignment. The company plans to lay off over 12,000 mid‑ and senior‑level employees, amounting to about 2% of its workforce, part of its shift toward becoming a “future‑ready” organisation.

The broader context reflects continued caution in India’s $283-billion IT sector, grappling with rising attrition—TCS’s rate hit 13.8% in June, a two-year high—as well as the effects of inflation, delayed client spending, and global economic headwinds. 

What this means:

• A substantial portion of TCS staff will see an uptick in pay, though modest compared to past years.
  
  

• The delayed hike underscores persistent industry-wide pressure on margins and demand.
  
  

• While junior and mid-level staff gain some reassurance, layoffs signal a calculated pivot in workforce strategy.