Tata Consultancy Services (TCS), India’s largest IT services provider, has announced that salary hikes for the fiscal year 2025 will be reviewed and implemented based on the evolving business environment.
The announcement has sparked discussions among employees and industry experts about the future of compensation trends in the IT industry.
TCS has emphasized its commitment to rewarding high-performing employees.
While the average hike is expected to be between 4-8%, top performers could receive increments of up to 12-15%.
This shift towards performance-based pay aligns with the company’s strategy to drive productivity and innovation.
TCS Salary Hike Trends Over the Years and Official Statement
TCS has historically been known for its consistent salary increments, rewarding employees for their contributions and aligning compensation with market standards.
However, the fiscal year 2025 marks a departure from this trend, with the company planning to roll out lower salary hikes compared to previous years.
- FY22: Employees received an average hike of 10.5%, reflecting strong post-pandemic recovery.
- FY23: Increments ranged between 6-9%, as the IT sector began to moderate after the initial surge in demand.
- FY24: Salary hikes were slightly higher, at 7-9%, despite global economic concerns.
- FY25: The expected hike is between 4-8%, the lowest in the past four years.
The reduced increments are attributed to the uncertain business environment, including the ongoing trade war, a potential US recession, and the impact of automation and artificial intelligence on traditional IT services.
Milind Lakkad, Chief Human Resources Officer (CHRO) at TCS, addressed the issue during the company’s Q4FY25 earnings press conference.
He stated, “Considering the uncertain business environment, we will decide during the year when to make that happen.”
This cautious approach reflects the company’s focus on balancing employee expectations with financial prudence.
Employee Reactions and Industry Implications
The announcement has elicited mixed reactions from TCS employees.
Some employees understand the challenges brought by the current economic climate. Others, however, worry about its impact on morale and retention.
Industry experts note that TCS’s decision could set a precedent for other IT companies, many of which are grappling with similar issues.
The IT sector has been facing headwinds, including reduced demand for traditional services, increased competition, and the need to invest in emerging technologies.
These factors have prompted companies to adopt a cautious approach to salary increments and workforce expansion.
Note: We are also on WhatsApp, LinkedIn, Google News, and YouTube. To get the latest news updates, subscribe to our channels. WhatsApp: Click Here, Google News: Click Here, YouTube: Click Here, and LinkedIn: Click Here.
