TCS Announces Salary Hikes for Employees to Boost Retention and Morale

Tata Consultancy Services (TCS), the biggest IT business in India, announced its most recent round of pay increases on September 2.

According to news agency PTI, the increases would range from 4.5% to 7% for the majority of its employees. Employees of the Tata Group company began receiving letters of increment on the evening of September 1st, and those with knowledge of the development told the news agency that the pay increases will take effect in September 2025.

This comes after discussions on a possible pay increase were put on hold for the past two months due to uncertain market conditions. Additionally, the investigation noted that the corporation did not respond to the email enquiries.

Pay Increases for Middle & Junior Employees

The article claims that TCS has raised the pay of its middle- and lower-level workers. The news agency was informed that the company’s best achievers received pay increases exceeding 10%.

Milind Lakkad, the executive vice president and chief human resources officer of TCS, stated in July that the business has not decided to raise staff salaries. “We have not yet made any decisions regarding wage hikes,” Lakkad stated during the company’s quarterly news conference.

Attrition and Retention Strategy

The company was working to reduce its attrition rate, which hit a two-year high at the conclusion of the first quarter of the fiscal year 2025–2026, the top human resources officer also told the media. According to Milind Lakkad, TCS attrition exceeded its comfort limit of 13% as it reached a two-year high. At the news conference, he stated, “We are working to bring it down.”

TCS Layoffs 2025

TCS plans to lay off 2% of its workforce this year, or around 12,000 mid- and senior-level personnel. This is at a time when many of its competitors have put compensation increases on hold or postponed them.

Lakkad and CHRO-designate K Sudeep sent out an internal message on 6 August stating that the pay increase will take effect on September 1. In response to a question from the media, the corporation stated that it can affirm that, as of September 1, 2025, it will be raising wages for almost 80% of its employees.

Future Outlook for TCS & IT Sector

TCS is nevertheless hopeful about a recovery and expects demand to pick up in the second part of the year. When discussing compensation increases, Indian IT CEOs have taken a cautious stance. Salil Parekh, the CEO of Infosys, stated that the company has completed its pay increases for the fourth and first quarters of the previous fiscal year when discussing the schedule for wage increases.

As it always does at the end of a cycle, Infosys is now starting to assess the timing for the next one. Two rises over 18 months resulted from the disruption of the normal cycle during COVID-19. Nothing is going to change. The company will continue using its current procedure and promptly disclose the upcoming cycle.