The country’s largest IT services company, Tata Consultancy Services (TCS), has given good news to its employees.
The company has increased salaries by 4.5% to 7% for most staff. Increment letters were sent late on Monday night, and the new salaries will be effective from September.
Background: Layoffs and Market Pressure
This salary hike comes just a few months after TCS laid off around 12,000 employees, which had affected the IT sector and led to a fall in the company’s shares.
According to reports, the salary increment mainly benefits lower to middle-level employees, while top performers have received more than 10% hike.
In the April-June quarter, TCS reported a rise in employee attrition to 13.8%. Experts believe this pay hike is an important step to retain employees and boost morale.
Employee Morale vs. Investor Concerns
While the salary hike may put cost pressure on the company and make investors slightly cautious, retaining skilled staff is expected to help TCS strengthen growth
and client retention, which could eventually restore investor confidence.
Earlier, TCS had paused salary hikes for two months due to market conditions and rising costs.
In July, Executive Vice President and HR Officer Milind Lakkad had stated that no decision had been taken regarding increments, which created uncertainty among employees.
Many believed that layoffs and slow IT demand would delay hikes further.
By implementing the hike from September, TCS has now sent a clear signal that it values its employees and wants to move forward together with them.
