Tata Consultancy Services (TCS), India’s largest IT services firm, has announced wage hikes for approximately 80% of its workforce, primarily covering junior to mid-level employees.
The pay revisions will take effect from September 1, 2025, and were communicated to staff via an internal email from Chief Human Resources Officer Milind Lakkad and CHRO Designate K Sudeep.
The announcement comes at a time of significant internal restructuring, including the planned layoff of 12,000 employees, or about 2% of the global workforce, mostly from middle and senior levels.
The dual move—rewarding a large section of employees while trimming others—reflects TCS’s broader strategy to become a “future-ready organisation”.
Balancing Retention and Realignment
The decision to implement wage hikes is seen as part of a talent retention strategy amid growing concerns over morale and job security.
In recent months, TCS had paused annual salary increments and frozen hiring, contributing to anxiety among employees.
The company’s bench policy, which requires employees to find new projects within 35 days or exit, has also led to workforce reductions across offices in Pune, Chennai, Kolkata, and Hyderabad.
In the internal communication, TCS thanked employees for their dedication and emphasized the importance of building the company’s future together.
The company has not disclosed the exact amount of the salary hikes. However, the revision will benefit a large segment of its operational workforce.
A New Hiring Model for Transparency at TCS
Alongside the wage hikes, TCS has introduced a new hiring model aimed at improving transparency in its recruitment process.
The company has engaged a US-based third-party staffing firm to manage interactions with recruitment vendors.
This change eliminates direct contact between vendors and TCS, reducing the risk of bias or irregularities in hiring practices.
The new model is part of a broader effort to streamline operations and ensure that hiring aligns with strategic goals.
It also reflects TCS’s intent to modernize its workforce planning and vendor management systems.
Strategic Shift Toward Future-Readiness
TCS has framed these changes within its larger transformation agenda.
The company is investing in AI deployment, new market expansion, next-gen infrastructure, and reskilling initiatives.
The goal is to build a leaner, more agile workforce capable of supporting clients in a rapidly evolving tech landscape.
The layoffs, while difficult, are being positioned as necessary for long-term sustainability.
TCS has stated that associates who cannot be deployed to suitable projects will be released from the company.
To support those affected, reskilling and redeployment initiatives are currently underway.
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