Tata Consultancy Services (TCS), India’s largest IT services firm, has rolled out annual salary hikes ranging from 4.5% to 7% for a majority of its employees, effective September 1, 2025.
The increment letters were sent out late Monday evening, marking the end of a five-month delay in the company’s usual April cycle.
The hikes apply to employees up to grade C3A, which includes freshers, junior staff, and mid-level professionals.
According to internal communications, around 80% of the workforce is covered under this revision. Exceptional performers have reportedly received hikes exceeding 10%.
Lowest Increment Band in Four Years
While the announcement brings relief to employees awaiting compensation updates, the hike range is among the lowest in recent years.
In FY22, TCS offered average hikes of 10.5%, followed by 6–9% in FY23.
The current 4.5–7% band reflects the cautious sentiment prevailing in the IT sector, driven by subdued revenue growth, client hesitancy, and the impact of AI-led transformations.
The salary revision corresponds to the fiscal year ending March 2025 and will not be paid retrospectively.
Employees will see the revised compensation reflected in their September payroll.
TCS Workforce Restructuring and Hiring Freeze in Parallel
The salary hike announcement comes on the heels of significant workforce restructuring.
In August, TCS confirmed plans to reduce its headcount by approximately 2%, impacting over 12,000 mid- and senior-level employees.
The company has also suspended lateral hiring for these levels and revised its bench guidelines, allowing employees 35 non-project days annually while targeting 225 billable days per year.
These measures are part of a broader effort to optimize costs and improve utilization amid a challenging business environment.
Focus on Retention as Attrition Inches Up
TCS reported an attrition rate of 13.8% in its June quarter earnings, slightly higher than previous quarters.
The company hopes that the salary hikes, though modest, will help retain talent and stabilize workforce morale.
Sources indicate that TCS has strategically focused the increments on lower and mid-level employees, who form the backbone of delivery operations.
TCS has excluded higher-ranked employees in bands C3B, C4, and C5 from this round of hikes.
TCS Internal Communication Highlights Strategic Intent
In an internal email dated August 6, Chief Human Resources Officer Milind Lakkad and CHRO-designate K Sudeep wrote: “We are pleased to announce a compensation revision for all eligible associates in grades up to C3A and equivalent, covering 80% of our workforce. This will be effective 1st September 2025.”
The message underscores TCS’s intent to balance cost discipline with employee engagement, even as the company navigates a volatile global IT landscape.
Note: We are also on WhatsApp, LinkedIn, and YouTube to get the latest news updates. Subscribe to our Channels. WhatsApp– Click Here, YouTube – Click Here, and LinkedIn– Click Here.
