Tata Consultancy Services (TCS), India’s largest IT services company, has announced its annual salary increases after a five-month delay.
Starting September 1, 2025, junior to mid-level employees—from freshers up to grade C3A—will get raises averaging 4.5% to 7%. Top performers will receive hikes of more than 10%.
Lowest Salary Increase in Four Years
Normally, TCS gives salary hikes in April, but this year it was postponed due to a slowdown in business and financial pressures.
The current hikes are among the smallest in four years, lower than 6–9% in FY23 and 10.5% in FY22.
While FY24 also had hikes between 4.5% and 7%, the slow growth in the IT industry has kept raises modest.
Note: The salary hike will not be backdated. Employees will see the new pay starting from their September salary.
Who Will Receive the Raises?
An internal email from TCS’s HR says about 80% of employees, mainly junior and mid-level staff, will get the hike. Senior employees in higher grades (C3B, C4, C5) are not included in this round.
Cost-Cutting Moves and Layoffs
The salary hike comes amid cost-cutting efforts. TCS plans to lay off about 2% of its 600,000-strong workforce, affecting over 12,000 mid- and senior-level employees this year.
The company has also paused hiring at senior levels, reduced the number of benched employees at key locations, and delayed onboarding around 600 lateral hires.
In June, TCS introduced a new bench policy that limits bench time to 35 days per year and requires employees to bill at least 225 business days annually.
Industry Challenges
These salary hikes happen during a tough time for the IT sector, which faces slow revenue growth, delays in client decisions, tariff uncertainties, and disruption from AI technology.
These issues have forced companies like TCS to be careful with pay raises and workforce decisions.
What Lies Ahead?
While the salary increases offer some relief, the small hikes combined with layoffs and stricter policies show the challenges Indian IT companies face.
TCS’s cautious approach reflects the need to balance rewarding employees and managing an uncertain business environment.
