TCS Rolls Out Salary Hikes After Delay: What Employees Need to Know

A Long Wait Finally Ends

India’s largest IT services company, Tata Consultancy Services (TCS), has finally announced its long-awaited annual salary hikes. Traditionally rolled out in April, this year’s increments were delayed by nearly five months, creating a wave of anticipation and concern among employees. On September 1, the company officially confirmed that the new salary structure would take effect, bringing both relief and mixed reactions within its vast workforce.

Who Gets the Hike?

The salary increase will benefit around 80% of TCS’s employees, primarily those in junior to mid-level grades up to C3A. These employees, forming the backbone of the company’s global operations, will see pay increases ranging from 4.5% to 7%. Exceptional performers, however, stand out with double-digit raises—though such cases remain limited.

For many employees, the hike feels like a long-overdue recognition of their contributions during uncertain times. Yet, compared to previous years when increments averaged between 6% and 10%, this year’s raise is seen as modest, even conservative.

Why the Delay and Lower Hikes?

The IT sector has been facing headwinds from global economic uncertainty, reduced client spending, and an industry-wide focus on cost optimization. For TCS, delaying hikes was part of a cautious approach to balance employee welfare with financial prudence.

While the company has recorded stable revenues, management has indicated that demand remains subdued in some markets. By rolling out hikes now, TCS is sending a signal that it values its workforce, even if the increments are more restrained than in earlier years.

The Other Side: Layoffs and Restructuring

The salary announcement has also been overshadowed by news of workforce restructuring. TCS plans to reduce its headcount by approximately 12,000 employees, largely from mid- and senior-level positions. This accounts for nearly 2% of its global workforce.

According to internal communications, the layoffs are part of a larger transformation strategy aimed at becoming a “future-ready organization.” The focus is shifting toward automation, artificial intelligence, and digital-first services, which requires realigning talent and reducing layers of management.

Employee Sentiment: Relief, But Not Without Frustration

Reactions among employees have been mixed. On one hand, junior professionals who received the hikes expressed relief after months of uncertainty. On the other hand, many voiced disappointment about the timing and the relatively small increments.

Some employees highlighted that they essentially “lost out” on raises for the April-to-August period, making the September hike feel less rewarding. Others noted that increments as low as 1% had been reported in certain cases, fueling discontent in internal discussions.

What This Means for the IT Industry

TCS’s decision to finally roll out hikes, despite economic caution, sets an important benchmark in the Indian IT sector. Being the industry leader, TCS often influences compensation trends across other companies like Infosys, Wipro, and HCL Tech.

Analysts believe this move could encourage other IT majors to follow suit with their own announcements in the coming weeks. At the same time, the layoffs highlight a broader shift across the sector—balancing growth with efficiency, and preparing for a future where technology plays an even greater role in delivery models.

The Balancing Act Ahead

For TCS, the current phase is about striking the right balance. On one side, it must maintain morale among its younger workforce with salary hikes and growth opportunities. On the other, it must adapt to a fast-changing technology landscape by optimizing costs and restructuring operations.

While the raises may not fully meet employee expectations, they mark a significant step in reassuring staff and stabilizing internal confidence. For the IT giant, the real challenge will be to keep its talent motivated while continuing to evolve as a leader in digital transformation.

Key Takeaways

• Salary hikes of 4.5%–7% rolled out from September 1, 2025.
• 80% of employees (up to grade C3A) will benefit.
• Top performers receive double-digit increments.
• Delayed by five months due to global market uncertainty.
• Workforce reduction of 12,000 employees as part of restructuring.
• Mixed employee sentiment: relief with lingering frustration.
• Sets the tone for the broader Indian IT industry.