Mumbai, August 7, 2025 — Tata Consultancy Services (TCS), India’s largest IT services company, has announced a salary hike for 80% of its employees, even as it prepares to lay off approximately 12,000 workers by the end of the year.
The salary revision, which will take effect from September 1, 2025, was communicated internally via an email sent by Chief Human Resources Officer (CHRO) Milind Lakkad and CHRO Designate K Sudeep. The message, accessed by news agency PTI, expresses appreciation for the dedication and performance of TCS staff and assures compensation adjustments across junior to mid-level roles.
“We are pleased to announce a compensation revision for all eligible associates in grades up to C3A and equivalent, covering 80 per cent of our workforce. This will be effective September 1, 2025,” the email stated.
The news has come as a mixed signal for employees, who are now dealing with a combination of relief and anxiety — a pay raise for most, but also the looming fear of layoffs for others.
Layoffs Amidst Growth and Realignment
Last month, TCS confirmed that it would cut its global headcount by 2%, which amounts to approximately 12,000 employees, as part of a broader strategic restructuring. The company cited the need to become a “future-ready organisation” with greater emphasis on artificial intelligence, market expansion, and workforce realignment.
As of June 30, 2025, TCS reported a total workforce of 6,13,069 employees, after hiring nearly 5,000 new employees in the April–June quarter.
A TCS spokesperson said the layoffs are not performance-related, but rather part of a strategic recalibration to prepare for an evolving tech landscape and shifting client demands. “This is a necessary step to align our talent with the company’s digital-first strategy,” the official noted.
Balancing Recognition and Restructuring
The wage hike covers junior to mid-level employees, the majority of whom make up the core operational structure of TCS. According to company insiders, this move aims to reward loyalty and productivity, especially for employees who have been instrumental in delivering critical client solutions during recent global economic uncertainty.
“We would like to thank each one of you for your dedication and hard work, as we build the future of TCS together,” the CHROs wrote in the internal memo.
However, the lack of clarity around the exact percentage of the salary hike and the simultaneous announcement of layoffs has created a sense of cautious optimism within the company.
Industry-Wide Ripples
TCS’s move is being closely watched by analysts and competitors alike. The dual approach of compensation revision paired with downsizing reflects a growing trend in the global IT services sector, where companies are reshaping their talent pool to fit AI-centric business models, even as they attempt to retain and motivate top performers.
“It’s a complex balancing act,” said tech analyst Arvind Mishra. “TCS is acknowledging the contribution of its workforce while also making difficult decisions to stay agile and competitive in an AI-driven global economy.”
What It Means for Employees
For the 80% of employees receiving the hike, the announcement is a welcome morale booster, especially amid a volatile global tech environment. But for the 2% facing job uncertainty, the road ahead remains unclear.
TCS has not yet specified which departments or geographies will be most affected by the layoffs, leading to speculation and unease in certain teams. Insiders suggest that roles being replaced or redefined due to AI and automation may be most vulnerable.
Looking Ahead
Despite the mixed signals, TCS continues to position itself as a leader in digital transformation and AI integration, with plans to invest heavily in cloud services, generative AI, and upskilling over the next year. The company’s leadership has reiterated its commitment to supporting employees through reskilling and internal mobility programs.
As the September 1 implementation date for the pay hike nears, all eyes will remain on how TCS balances its people-first promise with its future-focused transformation agenda.
