India’s largest IT services company, Tata Consultancy Services (TCS), has initiated its latest round of salary increases, offering hikes ranging from 4.5
per cent to 7 per cent for most employees, according to a PTI report released on Tuesday. Increment letters started reaching employees on the evening of September 1, with raises effective from September 2025. Insiders also revealed in the report that top performers received raises exceeding 10 per cent, reflecting TCS’s focus on rewarding high achievers amid competitive market conditions. Previous Delay And Management Comments The hike announcement comes after a two-month delay in salary discussions, attributed to uncertain market scenarios. Earlier, in July 2025, TCS’s Executive Vice President and Chief Human Resources Officer, Milind Lakkad, had stated no decisions had been made on wage hikes during the company’s quarterly press conference. Rising Attrition Poses Challenge TCS is simultaneously grappling with a rising attrition rate. For the April-June quarter of FY 2025-26, the attrition rate climbed to 13.8 per cent on a last twelve-month basis, surpassing the previous quarter’s 13.3 per cent and marking a two-year high. Lakkad acknowledged that the attrition exceeds the company’s comfort threshold of 13 per cent and confirmed that efforts are underway to reduce employee turnover. What This Means For Employees And The Industry The hike, covering mostly lower and middle-level employees, signals TCS’s intent to retain talent amid an increasingly competitive IT job market in today's time. The company continues to balance cautious optimism with strategic investments in employee satisfaction to stabilise its workforce. TCS Layoffs The announcement of salary increases comes shortly after reports revealed that TCS intends to cut around 2 per cent of its workforce, amounting to over 12,200 employees, in fiscal year 2026. These layoffs, designed to improve operational efficiency and agility, are likely to impact mostly mid- and senior-level professionals across various regions and business areas.
