Tata Consultancy Services Rolls Out Salary Hikes After Delay Amid Workforce Restructuring.

Tata Consultancy Services Rolls Out Salary Hikes After Delay Amid Workforce Restructuring

Tata Consultancy Services (TCS), India's leading IT services giant, recently announced salary hikes for about 80 percent of its workforce, effective September 1, 2025. This move comes after a notable five-month delay in the annual pay revision, marking a cautiously optimistic shift amidst challenging business conditions and significant internal restructuring.

Salary Hikes and Eligibility

The salary increases range between 4.5 and 7 percent, primarily benefiting employees from entry-level to mid-level bands, including freshers and assistant consultants up to grade C3A. Top performers within this segment have been rewarded with hikes exceeding 10 percent. However, senior-level employees in higher bands—C3B, C4, and C5—are not part of this increment cycle.

Delayed Implementation Amid Workforce Restructuring

TCS traditionally announces salary hikes in April, but this year’s revision was postponed due to ongoing market uncertainties. The salary increases will not be paid retroactively and apply only from September onwards. The timing coincides with TCS implementing workforce reductions, affecting approximately 12,000 mid- and senior-level employees as part of a strategic effort to become "future-ready." This simultaneously unfolding restructuring indicates a cautious approach balancing cost control and talent retention.

Industry Context and Performance Metrics

The salary revision reflects the cautious business environment gripping the IT industry. Although matching the FY24 increment levels of 4.5 to 7 percent, the hikes are lower than previous years when TCS offered between 6 to 10.5 percent raises. The company reported a rise in attrition rates to 13.8 percent in the June quarter, up from 13.3 percent previously. Alongside the hikes, TCS has frozen lateral hiring at mid- and senior levels, reduced bench strength across multiple cities, and faced criticism regarding delays in onboarding new hires.

Looking Ahead

Despite these challenges, TCS’s salary revision signals its commitment to rewarding a significant portion of its workforce while navigating a complex market landscape. The balance between advancing employee compensation and undergoing strategic cost-control measures underscores the company's focus on long-term resilience and growth.

As the IT sector evolves rapidly, TCS’s approach highlights the intricacies of managing talent, cost, and market pressures in one of the world's largest IT services firms. Employees and industry observers alike will be keenly watching how these decisions shape the company’s performance and workforce dynamics in the months ahead.