Tata Consultancy Services Raises Salaries for 80% of Staff Amid Layoffs

Tata Consultancy Services (TCS) has announced salary hikes for 80% of its workforce, effective September 1, following layoffs affecting over 12,000 employees. The hikes will cover junior and mid-level staff in grades up to C3A and equivalent. The IT major has not disclosed the quantum of salary increases. The move comes after TCS paused its April salary increment cycle due to macroeconomic uncertainties and weak demand.

Tata Consultancy Services (TCS) has announced significant changes to its compensation structure and workforce, effective September 1, 2025. The IT major will implement salary hikes for approximately 80% of its employees, primarily junior and mid-level staff in grades up to C3A and equivalent. This move comes after a pause in the company's April salary increment cycle due to macroeconomic uncertainties and weak demand.

The wage increases will cover junior and mid-level employees, making up about 80% of the company’s workforce. TCS CHRO Milind Lakkad and CHRO Designate K Sudeep confirmed that the salary adjustments will take effect from September 1. The specific details regarding the percentage of salary increases remain undisclosed.

In contrast, TCS has also announced plans to reduce its workforce by 12,000 employees this year. The layoffs, which will affect mainly mid to senior-level employees, are part of a strategic overhaul to realign the workforce model and focus on technological investments and AI implementation. TCS has stated that this restructuring is aimed at making the company "future-ready" and better equipped to navigate global market changes and economic uncertainties.

The current round of hikes comes amid caution across the IT industry, where other major players are also evaluating wage hike timelines. Infosys CEO Salil Parekh, for instance, mentioned that the company is beginning to evaluate the timing for the next round of compensation increases.

The mixed signals from India’s top IT players point to a sector in transition, balancing talent retention with cost pressures and preparing for shifts driven by AI and global market changes. TCS's move signals how the industry is navigating a global slowdown and the impact of AI disruption on traditional business models.

References:
[1] https://m.economictimes.com/news/new-updates/tcs-salary-hike-amid-12000-layoffs-it-major-announces-wage-hikes-check-who-is-getting-a-raise-and-who-is-being-laid-off/articleshow/123154701.cms
[2] https://timesofindia.indiatimes.com/business/india-business/tcs-salary-hikes-announced-amidst-plans-to-layoff-12000-employees-tcs-rolls-out-increments-for-80-employees-check-details/articleshow/123156164.cms