Tata Consultancy Services (TCS), India’s largest IT services firm, has resumed its annual salary revision cycle after a five-month delay, offering double-digit hikes to top-performing employees.
The company confirmed that the increments, effective from September 1, 2025, will range between 4.5% and 7% for the majority of staff, while exceptional performers will receive hikes exceeding 10%.
The revision applies to employees from fresher level up to grade C3A, covering nearly 80% of TCS’s workforce.
Senior-level employees in bands C3B, C4, and C5 have been excluded from this round of hikes, with their increments yet to be finalised.
Performance-Based Rewards Amid Cost Pressures
The double-digit hikes for high performers come at a time when the IT industry is grappling with muted revenue growth, delayed client decisions, and increased margin pressures.
TCS had deferred its usual April hike cycle due to macroeconomic uncertainties, including tariff threats and evolving AI-driven project demands.
In an internal communication dated August 6, Chief Human Resources Officer Milind Lakkad and CHRO-designate K Sudeep stated: “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 company clarified that the hikes will not be paid retrospectively and will be reflected in the September payroll.
Historical Comparison: Hikes Trend Downward
The current hike band mirrors last year’s range and marks a continued downward trend in salary increments.
In FY22, TCS offered average hikes of 10.5%, followed by 6–9% in FY23, and 4.5–7% in FY24.
The double-digit hikes this year are reserved only for top performers, indicating a more selective reward strategy.
Industry analysts suggest that TCS’s restrained hike structure is a strategic move to retain talent while managing operational costs.
This approach aligns with the company’s ongoing workforce restructuring efforts.
TCS Workforce Restructuring and Hiring Freeze
TCS recently announced plans to reduce its workforce by approximately 2%—around 12,000 employees—by March 2026.
The layoffs are expected to impact mid- and senior-level staff, particularly those unable to transition into AI-centric roles.
The company has frozen lateral hiring at mid and senior levels as part of its ongoing cost optimisation efforts.
In addition, it has tightened its bench policy by capping non-project days at 35 annually and setting a target of 225 billable days per employee.
Reports indicate that the onboarding of nearly 600 lateral hires has been delayed due to internal restructuring.
Meanwhile, delivery hubs in cities such as Chennai, Hyderabad, Pune, and Kolkata have experienced a noticeable reduction in bench strength.
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