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Tata Consultancy Services (TCS) announced on Wednesday that it will implement wage increases for 80% of its staff. India’s largest IT services company is increasing the wages of mostly junior and mid-level employees.
While many companies in the industry are resorting to large-scale job cuts due to US tariff impacts and AI, this action seems to be an effort to retain valuable talent and improve morale at the lower levels of the organization.
In a company-wide mail circulated by Chief Human Resources Officer Milind Lakkad and Designate CHRO K Sudeep, TCS announced that the wage revision will be applicable from September 1, 2025.
“We are pleased to announce a compensation revision for all eligible associates in grades up to C3A and equivalent, encompassing 80% of our population,” the mail said. The size of the increases has not been revealed.
TCS plans to lay off approximately 12,000 employees this year, or about 2% of its global workforce. The company has attributed the job cuts to a larger restructuring plan to emerge as a ‘future-ready organization.’
As per the company’s previous announcement, the job cuts will primarily hit middle and senior-level employees and are also a part of a broader drive towards automation, deployment of AI, and new market expansion. The development has triggered alarm in the sector, especially since it comes at a time when demand for technology is slowing and macroeconomic uncertainties are rising.
This TCS salary hike while reducing its headcount, has given mixed signals to the markets. The company’s stock slipped 3.5% on Wednesday after disappointing earnings estimates and reaffirmed deferrals in salary increases earlier this quarter.
The firm, however, stood by its dual-path strategy. “We can officially say that we are giving wage increases to about 80% of our staff from 1 September 2025,” TCS replied to media inquiries without stating the magnitude of the increases or the details of the layoffs.
TCS has stated that it is restructuring its business model in line with new technologies and evolving client needs. “TCS is on a transformation path to become a future-ready organization,” the firm stated earlier, adding that it is concentrating on “making investments in new-tech domains, expanding into new geographies, scaling AI for our customers and ourselves… and rebalancing our workforce model.”
The firm says several of its reskilling and redeployment projects are already underway to train staff for new jobs. As part of the shake-up, those who cannot be redeployed internally are being made redundant.
Also Read: TCS Layoffs Expose Deeper Workforce Crisis Than Rivals, Analysts Weigh in
TCS layoffs and restructuring could be indicative of wider changes within India’s IT job cuts. The sector is struggling with global macroeconomic uncertainty, geopolitical tensions, and the effects of US tariffs on client attitudes.
India’s leading IT companies, such as TCS, have posted single-digit growth in Q1 FY26 revenues, indicating a muted June quarter. As clients hold back on decision-making and global tech demand is under strain, most analysts think the industry is set for a reset phase, initiated by cyclical decelerations and structural changes caused by AI-driven disruptions.
The pay hike for many TCS employees will, at best, bring short-term relief; however, with the looming layoffs and the push towards automation, the winds will chill, especially for mid-career professionals.
Industry observers are also sounding alarms over the mental well-being cost of mass firings to young professionals entering the workforce in the post-pandemic tech boom. With companies restructuring to remain current in the age of AI, the IT talent pool could be in for a challenging and extended transition.
Also Read: Are TCS Layoffs the First Wave? Experts See More IT Jobs at Risk
