Tata Consultancy Services (TCS), India’s largest IT services firm, has announced annual salary hikes ranging from 4.5% to 7% for the majority of its employees, effective September 1, 2025. The company has also extended double-digit increments—exceeding 10%—to top-performing staff, marking a strategic move to retain talent amid evolving industry dynamics.
The hike applies to employees in junior to mid-level grades (up to C3A), covering approximately 80% of the workforce. Increment letters were issued beginning late Monday evening, and revised salaries will be reflected in the September payroll. Senior-level employees in higher bands (C3B and above) are not included in this round of revisions.
This announcement follows a five-month delay in the annual review cycle, traditionally conducted in April. The deferment was attributed to macroeconomic uncertainties and muted revenue growth across the IT sector. In July, TCS also announced a workforce reduction of 2%, affecting around 12,000 mid- and senior-level employees, citing challenges in project deployment and the need to adapt to AI-driven transformations.
The current round of hikes is among the lowest in the past four years. In comparison, average increments stood at 6–9% in FY23 and 10.5% in FY22. Despite the modest figures, the company emphasized its commitment to rewarding performance and maintaining competitive compensation standards.
TCS’s attrition rate rose to 13.8% in the June quarter, underscoring the importance of retention strategies in a competitive talent market. The company has also introduced a revised bench policy, limiting non-billable time to 35 days annually, with a target of 225 billed business days per employee.
Industry analysts view the hike as a balancing act—aimed at boosting morale and productivity while navigating cost pressures and shifting client expectations. Other IT majors, including Cognizant, have also resumed their hike cycles, signaling cautious optimism across the sector.
