TCS Plans 2025 Salary Hike For 80% Staff Following Announcement Of 12,000 Layoffs

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New Delhi: Tata Consultancy Services (TCS), India’s largest IT firm, is going to give most of its employees a salary boost starting September 1, 2025. However, this comes at a time when the company is also cutting jobs—over 12,000 mid and senior-level staff, which is about 2 percent of its global workforce, will be let go this year.

Who is getting a pay hike?

The pay raises will go to about 80 percent of TCS’s staff, specifically those in junior and mid-level roles—anyone up to grade C3A or an equivalent level.

Employees in these grades include freshers and those with a few years of experience.

Last year, TCS offered pay increases between 4.5 percent and 7 percent, with top performers getting even more. This year’s average raise hasn’t been made public yet, but analysts say it’s likely to be in the same range (possibly 4 percent to 8 percent).

The wage hikes are intended as a thank you to these employees for their hard work, especially during a time when the tech industry is facing slow growth, delayed projects, and uncertainty around new technologies like artificial intelligence.

Who is not getting a hike—and who is losing jobs?

The remaining 20 percent of employees, mostly in mid- and senior-level management, are not eligible for the current salary increase. Many of them are now facing layoffs.

About 12,000 people, mainly those with long experience (often 10+ years), are being laid off as part of TCS’s plan to “future-proof” the company. Some of these employees have been offered early retirement or severance, depending on their seniority.

The company says it is investing more in new technologies, entering new markets, and deploying AI at scale, so it needs fewer managers and a leaner workforce.

Employees who are let go will be given financial packages (typically three to five months' salary) and help to find jobs elsewhere, including connections to academic partners and other companies.

Why is this happening?

TCS, like much of the IT industry, is under pressure from slow revenue growth, cautious client spending, and the impact of new technology that automates routine jobs.

The layoffs are part of a major restructuring. TCS wants to focus its workforce on skills that match the company’s move into areas like AI, cloud computing, and cybersecurity.

TCS is also implementing stricter workforce policies, such as limiting the amount of time employees can spend without being assigned to a project. Those who can't redeploy within a set time may be let go.

The salary hikes start on September 1, 2025.

Most layoffs (around 90 percent) are set to take place in the July-September quarter, though the process will continue for the rest of the financial year.

TCS has about 613,000 employees as of June 2025. Even as layoffs are announced, the company hired about 5,000 new employees last quarter, showing an ongoing effort to remake its staff with skills needed for the future.