By Kavita Mistry 
After a five-month delay, Tata Consultancy Services (TCS), India’s largest IT services firm, has rolled out its annual salary hikes effective September 1, 2025. Junior to mid-level employees, from fresher grades up to C3A, will receive average hikes of 4.5–7%, while top performers will take home increases of over 10%.
Lowest Hike in Four Years
The increment cycle, typically rolled out in April, was postponed amid business slowdown and financial pressure. This year’s revision is one of the lowest in four years, lower than the 6–9% hikes in FY23 and 10.5% in FY22. While FY24 saw a similar range of 4.5–7%, the industry’s current muted growth has kept hikes modest.
Notably, the increments will not be retrospective. Employees will see the revised pay reflected only from their September salaries.
Who Gets Covered
According to an internal email from TCS’s HR leadership, the revision covers 80% of the workforce, primarily junior to mid-level employees. Senior employees in higher bands (C3B, C4, C5) have been excluded from this round of hikes.
Cost-Cutting Measures and Layoffs
The pay revision comes alongside cost-control initiatives. TCS is in the process of laying off about 2% of its 6-lakh workforce, impacting over 12,000 mid- and senior-level staff this fiscal. Additionally, the company has frozen lateral hiring at senior levels, trimmed benched employees across key delivery centres, and faced criticism for delaying onboarding of around 600 lateral hires.
The IT giant also introduced a new bench policy in June, limiting bench time to 35 days per year and requiring 225 billed business days annually.
Industry Headwinds
The hikes come amid a tough phase for the IT industry, marked by muted revenue growth, client decision delays, tariff uncertainties, and AI-driven disruption. These challenges have forced companies, including TCS, to tread cautiously on compensation and workforce management.
Outlook
While the salary hikes provide some relief to employees, the combination of modest increments, layoffs, and stricter work policies reflects the challenging environment facing Indian IT firms. For now, TCS’s cautious approach signals a balancing act—rewarding employees while preparing for an uncertain business climate.