TCS Salary Hike In a surprising yet strategic move, Tata Consultancy Services (TCS) has announced a salary hike for nearly 80% of its workforce, effective September 1, 2025. This decision, which comes even as the IT giant plans to lay off over 12,000 employees this year, has sparked widespread discussions in the tech industry.
The TCS salary hike applies mainly to employees at mid to junior levels—those falling under grade C3A and below—and is part of the company’s larger shift toward becoming a future-ready organisation. The announcement was made via an internal email by TCS CHRO Milind Lakkad and CHRO Designate K Sudeep on Wednesday, August 6, 2025,
and has since been confirmed by the company.
What’s in the Email? TCS Confirms the Hike
The internal communication reads:
“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.”
While the exact percentage of the hike has not been disclosed yet, the message has brought a wave of cautious optimism among employees.
TCS Salary Hike Comes Amid Layoffs — Why Now?
Here’s the twist: this TCS salary hike comes right when the company is in the middle of a significant layoff cycle, expected to impact around 12,000 employees globally—roughly 2% of its workforce. So, what’s the strategy behind this?
TCS has clarified that the layoffs are part of a broader workforce realignment plan focused on reskilling, redeployment, and adopting AI-driven solutions. While senior and middle management will be most affected by the layoffs, the salary hike is clearly aimed at retaining and motivating junior and mid-level talent.
A Balancing Act: Rewarding Talent While Reshaping the Workforce
TCS explained the decision as part of its transformation into a “future-ready organisation.” According to a previous company statement:
“This includes strategic initiatives on multiple fronts, including investing in new-tech areas, entering new markets, deploying AI at scale for our clients and ourselves, deepening our partnerships, creating next-gen infrastructure, and realigning our workforce model.”
So essentially, TCS is trimming at the top and nurturing the base—a strategic pivot that reflects where the company wants to go in the next decade.
What This Means for Employees
For the 80% of employees covered under this hike, the move is a welcome acknowledgment of their contributions, especially during a challenging time marked by macroeconomic uncertainties, AI-led disruptions, and global market volatility.
However, for those in higher bands, particularly middle and senior management, the future appears less secure. TCS has already stated that employees whose redeployment is not feasible will release from the organisation over the course of the year.
The Bigger Picture: Is the IT Industry Facing a Reset?
The decision by TCS to combine salary hikes with layoffs is not happening in a vacuum. India’s top IT companies—including Infosys, Wipro, and HCLTech—have reported muted revenue growth in Q1 FY26, with many citing geopolitical tensions, delays in client decision-making, and US tariffs as significant headwinds.
This raises an important question:
Is the Indian IT sector preparing for a fundamental reset?
With AI automating several processes, and global clients becoming more cost-conscious, companies are now force to rethink traditional outsourcing models. Reskilling, realignment,
and tech deployment seem to be the only way forward—and TCS is leading this charge.
Why the TCS Salary Hike Still Matters
In spite of the turbulence, this TCS salary hike is significant for a few reasons:
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Retention: Junior and mid-level employees are the operational backbone of any IT company. Keeping them motivated is key.
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Morale Boost: With layoffs looming, a positive announcement helps balance the emotional impact.
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Brand Reputation: Moves like this help preserve TCS’s image as an employee-friendly company, even in challenging times.
What to Expect Next
Employees are now awaiting more clarity on the following:
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Exact percentage of the salary hike
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Performance metrics tied to future hikes
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Details on redeployment plans for at-risk employees
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Future hiring or restructuring policies
As of now, no specific hike amount has reveal. But insiders suggest it could vary depending on performance and role.
Reactions from the Industry and Analysts
Industry experts and HR analysts have weighed in on the mixed signals TCS is sending. One industry watcher noted:
“It’s a clear case of strategic pruning. They’re letting go of legacy roles while investing in future talent. It’s business evolution, not just cost-cutting.”
Even on social media platforms like LinkedIn and X (formerly Twitter),
employees and analysts are both praising and questioning the timing of the move.
Where Can You Read More?
You can follow updates in credible publications like The Hindu ePaper, which continues to offer in-depth insights into India’s evolving tech industry landscape, including TCS’s shifting dynamics.
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Conclusion
So, is this TCS salary hike a genuine gesture to appreciate employees—or a carefully crafted move to manage morale amid downsizing?
Maybe it’s a bit of both. But one thing is clear: TCS is making bold moves to stay ahead in an AI-first world. And as employees, understanding where the company is headed will just as important as reading the numbers on your next payslip.
