TCS Salary Hike 2025: 80% Employees to Get 4.5%–7% Appraisal After 5-Month Delay Amid 12,000 Layoffs

India's largest IT services company, Tata Consultancy Services (TCS), has announced its annual salary hikes, which had been delayed by five months. The company confirmed that effective September 1, 2025, employees will receive salary increases ranging from 4.5% to 7%, with top performers set to receive hikes exceeding 10%. These increments are applicable for the fiscal year ending March 2025.

TCS Salary Hikes for 80% of Workforce Amid Layoffs

Earlier in August as per multiple news reports, internal communications from TCS Chief Human Resources Officer Milind Lakkad and CHRO-designate K Sudeep had indicated that a salary revision was in the pipeline. In an email to employees, they wrote, "We are pleased to announce a compensation revision for all eligible associates in grades up to C3A and equivalent, covering 80% of our workforce."

The move is aimed at retaining talent and maintaining morale during a period when the Indian IT sector is grappling with client delays, sluggish revenue growth, and concerns about the broader economic outlook, including AI-driven disruptions and global tariff changes.

TCS Layoffs 2025: Delayed Salary Revisions Due to Industry Headwinds

Typically, TCS rolls out salary increments in April each year. However, this year's hike was postponed, reflecting a cautious approach amid headwinds in the global IT services industry. The raises announced now will not be paid retrospectively, meaning eligible employees will start receiving the revised pay from the September payroll cycle.

According to sources familiar with the development, the salary hikes will apply to employees up to grade C3A, which covers junior and mid-level staff, including freshers. Employees in higher bands such as C3B, C4, and C5 will not be eligible for the current round of increments.

Lowest Salary Hikes in Recent Years; Delay in Hiring in TCS

The salary hikes announced for FY25 are among the lowest in recent years. In FY24, employees received similar raises of 4.5% to 7%, while FY23 saw hikes between 6% and 9%, and FY22 offered as much as 10.5%. The subdued revision for FY25 reflects weak client spending, project delays, and macroeconomic uncertainties affecting the global tech services industry.

Furthermore, TCS is reportedly addressing delays in onboarding nearly 600 lateral hires, adding to the perception of cautious expansion amid a shifting market landscape.

Despite the salary hike, TCS has also taken a series of steps to optimise its operations. The company plans to reduce its workforce by approximately 2% by March 2026, which could impact over 12,000 employees, mostly from the mid and senior-level bands. As of June 2025, TCS had a total headcount of 613,069 employees.

In June, TCS revised its bench policy, allowing employees to be unallocated for up to 35 days per year, down from earlier limits. Additionally, the company has set a target of 225 billable business days per employee annually, signaling a push for higher productivity.