New Delhi: In a move that’s drawing both relief and concern, Tata Consultancy Services (TCS), the country’s largest IT services firm, has announced salary hikes for a vast majority of its employees, even as it proceeds with plans to cut nearly 12,000 jobs this year. The company revealed on Wednesday that the wage hike will benefit around 80% of its workforce mostly those at junior to mid-level positions with effect from September 1, 2025.
The announcement, made via an internal email by CHRO Milind Lakkad and CHRO-designate K Sudeep, was positioned as a gesture of gratitude for employees’ commitment and contribution. “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 read, thanking employees as TCS charts its next phase of transformation.
The exact scale of the hike was not disclosed, but TCS later confirmed in a statement that the decision aims to "reward and retain talent" during a crucial phase of reorientation.
This development comes in the shadow of a major internal restructuring. Just last month, TCS revealed it would part ways with approximately 2% of its global workforce, translating to around 12,000 roles mostly in middle and senior management. The layoffs, the company stated, are part of a broader roadmap to evolve into a “future-ready organisation,” which includes scaling AI deployment, expanding into emerging markets, upgrading digital infrastructure, and realigning human resources.
TCS emphasized that numerous reskilling and redeployment efforts are ongoing to absorb employees into new roles. However, those whose skillsets no longer align with strategic needs are being let go.
The juxtaposition of wage hikes with significant job cuts has sparked debate in the tech industry about a potential paradigm shift. With the specter of AI automation, tighter global trade norms including steep US tariffs and uncertain client spending, India's IT giants are increasingly under pressure to revamp operational models.
TCS, like its peers, reported modest single-digit revenue growth in Q1 FY26, reflecting a broader industry slowdown triggered by macroeconomic instability and geopolitical upheaval. As the digital landscape evolves rapidly, companies like TCS are being forced to make tough choices balancing between recognition for the present workforce and realignment for the future.