TCS Implements Pay Increases for 80% of Workforce Starting September 1

Tata Consultancy Services (TCS), India's largest IT services firm, will roll out wage hikes to nearly 80% of its employees starting September 1, 2025. This move comes even as the company proceeds with layoffs affecting about 12,000 workers globally.

The announcement, made via an internal email on August 6 by Chief Human Resources Officer (CHRO) Milind Lakkad and CHRO Designate K. Sudeep, confirmed the hikes would apply to eligible employees up to grade C3A — typically those in junior to mid-level roles.

📩 “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 email stated.

Although the exact hike percentages were not disclosed, the company issued a statement confirming the move, positioning it as part of a broader talent retention strategy. The raise comes at a time when TCS is also executing a major restructuring plan — one that includes laying off 2% of its global workforce, largely from senior and middle management roles.

💡 TCS explained the dual approach as necessary to become a "future-ready organisation", one that leans heavily into AI, technology investments, market expansion, and workforce realignment.

🛠️ “This includes strategic initiatives on multiple fronts — investing in new tech, deploying AI at scale, entering new markets, and reshaping our workforce model,” TCS stated in July.

The workforce realignment has sparked conversations across the IT sector about the future of employment in a post-AI and macroeconomically strained environment. Layoffs and wage hikes in tandem reflect a changing tide in India's IT services industry — once known for job stability and steady career paths.

📉 In Q1 FY26, India’s top IT firms reported single-digit revenue growth. Global tech demand is cooling due to geopolitical tensions, uncertain macroeconomic trends, and outsourcing concerns amplified by recent U.S. tariff moves. Delayed client decision-making continues to weigh heavily on industry growth prospects.

TCS’s move to reward lower and mid-tier employees while reducing senior headcount is seen by analysts as a pivot — both to cut costs and reposition its talent base for an AI-driven, digital-first future.