TCS rolls out lowest salary hike in four years after largest-ever layoffs

Tata Consultancy Services Ltd. has rolled out its lowest salary hike in four years after its biggest round of layoffs a couple of months ago.

TCS, apart from the layoffs, has paused senior-level hiring and introduced strict bench policy—max 35 days without a project.(Reuters)

The increment ranges from 4.5%-7% for a majority of TCS employees, the Press Trust of India reported on Tuesday, citing sources. That compares with 10.5% in FY22, 6-9% in FY23, 7-9% in FY24. About 80% employees in grades up to C3A—including freshers and junior to mid-level staff—would receive the hikes effective 1 September, according to the Economic Times. The senior-level staff—about 20% of the workforce—were excluded from the salary hike.

The increment was due in April. Three months later, TCS effected layoffs.

In July 2025, TCS announced its biggest ever downsizing to lay off 12,000 mid and senior-level employees equivalent to 2% of its global workforce of 600,000. The company framed this as a response to “skill mismatches” but analysts saw the move as part of a strategic shift towards AI-driven operational efficiency.

Additionally, TCS has paused senior-level hiring, introduced strict bench policy—max 35 days without a project—and frozen annual pay hikes globally.

The layoffs and delayed salary hikes are on top of a two-year high attrition rate for TCS. On a trailing twelve-month basis, Attrition surged to 13.8% in April-June 2025—TCS accepted that this was slightly above its comfort zone of 11-13%.

Meanwhile, TCS on Tuesday announced that it has won a €550-million deal from Scandinavian insurer Tryg in its first mega contract so far this fiscal. Mega deals, which are typically worth more than $500 million, are key revenue drivers for IT services companies.

On Tuesday, TCS shares traded flat at ₹3,112.15 apiece on the BSE even as the benchmark Sensex ended the day 0.26% lower at 80,157.88 points.

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