TCS Employees Face Lowest Salary Hike in Four Years

Ratan Tata’s Tata Consultancy Services (TCS), one of India’s largest IT services firms, is set to announce annual salary hikes for its employees for the financial year 2025-26. However, the expected increment is likely to be the lowest in the last four years.

### Expected Salary Hike

According to an Economic Times report, TCS salary hikes, which are set to be rolled out this month, will see average increments ranging between 4-8 percent. In February, TCS released its quarterly variable pay (QVP) for the October-December period for eligible employees. Many junior and mid-level employees will receive 100 percent of their variable pay, while senior employees will receive lower increments ranging from 20 to 40 percent.

### Employee Categories and Compliance

TCS employees fall under various categories based on their positions and seniority levels within the IT firm. The ‘Y’ grade is the lowest rung that comprises trainees, followed by C1 (systems engineers), C2, C3-A & B, C4, C5, and CXOs. Only C3B and above level employees are graded as senior-level staff.

Notably, TCS has linked salary hikes and variable pay to employees’ compliance with the company’s return-to-office (RT) policy, which was introduced in early 2024. This policy mandates a five-day office workweek for most employees.

### Offsite vs. Onsite Employees

According to a report by SightsIn Plus, TCS’ offsite employees can expect a 7-8 percent hike, while onsite employees are likely to receive a lower increment of 2-4 percent. High-performance employees could be rewarded with a salary hike ranging between 12-15 percent.

### Historical Context

The current increment is poised to be the lowest salary hike for TCS employees in the last four years. In FY24, TCS gave its employees an average hike ranging between 7-9 percent, 6-9 percent in FY23, and 10.5 percent in FY22.

### Workforce and Attrition

Earlier this year, TCS reported a net decline of 5,370 employees in the October-December quarter, reducing the company’s current workforce to 607,354. TCS also reported a marginal rise in attrition rate, which increased to 13 percent in Q3 from 12.3 percent in the previous quarter.

### Future Hiring and Promotions

Despite the challenges, TCS’ Human Resources chief Milind Lakkad stated that the IT giant is on track to hire 40,000 freshers in FY25 and anticipates increasing campus hiring in the next fiscal year. Lakkad added that promotions have also been a key focus, with more than 25,000 associates promoted during Q3, bringing total promotions for FY25 to over 110,000—nearly 20 percent of its workforce.