TCS to Roll Out Wage Hikes for 80% of Employees, Effective September 1 Amid Layoff Plan

Tata Consultancy Services (TCS), India’s largest IT services firm, revealed that salary hikes will be rolled out for approximately 80% of its employees—specifically targeting those in junior and mid-level roles (grades up to C3A and equivalents). These hikes will take effect from September 1, 2025 .

Timing and Internal Communication

In an internal communication sent by CHRO Milind Lakkad and CHRO-Designate K. Sudeep, employees were thanked for their dedication as part of the company's journey toward becoming "future-ready" . The email stated:

“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 1st September 2025,”
adding, “We would like to thank each one of you for your dedication and hard work, as we build the future of TCS together.”

Context: Layoffs Amid Transformation

This wage revision arrives at a crucial time: TCS has announced plans to lay off around 12,000 employees, representing 2% of its global workforce, predominantly from mid and senior levels . The company attributes this reduction to a skill mismatch and a strategic shift to redeploy talent into new tech domains like AI, new markets, and modern infrastructure .

Strategic Vision: Becoming Future-Ready

TCS underscores that the layoffs are a part of its broader strategy to evolve into a future-ready organisation—one which extensively leverages AI, new technology spaces, global expansion, and next-gen infrastructure. The wage hikes signal its intent to retain and motivate the core talent amid this transition .

Industry-Side Conversation

The move stands out in contrast to many peers in the IT sector who are deferring or freezing salary revisions due to slowing demand and macroeconomic pressures . Meanwhile, TCS is navigating market instability with a dual approach—retaining critical talent while optimizing workforce structure.

Tata Consultancy Services (TCS) is a global leader in IT services, consulting, and business solutions. As part of the prestigious Tata Group, it's one of India's largest and most valuable companies, known for its innovation, vast workforce, and extensive global presence.

About Tata Consultancy Services (TCS)

History and Evolution of TCS

TCS was established in 1968 as a division of Tata Sons, with Fakir Chand Kohli — widely regarded as the "Father of the Indian IT industry" — as its first general manager. The company's early work involved providing data processing services to other Tata Group companies and local Indian firms. In the 1970s, TCS began its international expansion by pioneering the "offshore delivery model," where work was done in India for international clients, a model that would become the foundation of India's IT services sector.

Key milestones in its history include:

• 1981: Establishment of India's first software research center, the Tata Research Development and Design Centre (TRDDC), in Pune.

• 2004: The company goes public with an IPO, which was one of the largest in India's history at the time.

• 2020-2021: TCS briefly became the world's most valuable IT company by market capitalization, surpassing Accenture.

• 2025: As of March 2025, TCS had over 607,979 employees in 150 locations across 46 countries, making it one of the largest private sector employers in the world.

Services and Products of TCS

TCS offers a comprehensive portfolio of services and solutions to clients across various industries, including banking and financial services, retail, manufacturing, and life sciences. Its services are broadly categorized into:

• IT Services: This includes application development, maintenance, and modernization; cloud services; cybersecurity; and infrastructure services.

• Consulting: TCS provides strategic advisory services to help businesses navigate digital transformation, improve operational efficiency, and innovate.

• Business Solutions: The company offers a range of business process services (BPS) and enterprise solutions in areas like supply chain management, human resources, and finance.

• Digital Transformation: TCS is a major player in emerging technologies like Artificial Intelligence (AI), the Internet of Things (IoT), and data analytics, helping clients leverage these technologies for growth and efficiency.

In addition to its services, TCS has developed several proprietary products and platforms, such as:

• TCS BaNCS™: A leading software suite for the banking and financial services industry.

• ignio: An AI-driven automation platform for managing IT and business operations.

• TCS iON: A strategic business unit focused on providing cloud-based solutions for educational institutions and small-to-medium businesses (SMBs).

• TCS MasterCraft: A suite of intelligent automation products for software development and data management.

Recent Developments

In recent years, TCS has continued to focus on innovation and adapting to market shifts.

• AI Focus: TCS has been aggressively training its massive workforce in AI skills and has launched new initiatives like the TCS AI WisdomNext™ platform, a GenAI aggregation platform that allows clients to experiment with various AI models.

• Research & Partnerships: The company partnered with IIT-Bombay to develop India's first Quantum Diamond Microchip Imager, an advanced sensing tool with the potential to improve semiconductor chip manufacturing.

• Global Expansion: In July 2025, TCS launched an AI-powered Research & Innovation Centre in Singapore to accelerate enterprise innovation.

• Market Challenges: The IT services sector is currently undergoing a structural shift, partly due to the rise of AI. This has led to concerns about job displacement and a need for new skillsets. In late July 2025, TCS announced plans to lay off a portion of its workforce, a move it attributed to skill mismatches rather than automation. This reflects a broader industry trend where companies are prioritizing specialized skills and efficiency over sheer employee numbers.

Conclusion 

Tata Consultancy Services’ decision to award wage hikes to 80% of its workforce, while simultaneously laying off 12,000 mid and senior-level employees, reflects a strategic recalibration amidst shifting industry dynamics.

By incentivising junior and mid-level talent through compensation revision effective September 1, 2025, TCS aims to retain its critical human capital during a transformative phase of AI adoption, new market expansion, and infrastructure investment. The move underscores a deliberate shift away from old operational models toward a leaner, more tech-forward organisation.

While the layoffs highlight market realities and skill mismatches, the wage hikes signal commitment to empower and motivate those leading day-to-day delivery and innovation.

Amid turbulence in India’s IT sector, TCS’s dual-pronged strategy—investment in future-ready capabilities paired with support for the core workforce—positions it to sustain competitiveness and emerge more resilient in a challenging global landscape.