Tata Consultancy Services has rolled out annual salary hikes for employees, with most increments ranging between 4.5% and 7%, although some employees have alleged that changes in compensation structure have lowered their effective salaries despite favourable performance ratings.
“In line with the announcement made during our Q4 earnings, we have rolled out annual increments to eligible employees. Additionally, we have completed the restructuring of compensation for all our India-based employees to align with the new labour codes.
The revised salary structure that the employees have received are guided by three key principles that include, compliance with the new labour codes, standardisation of wage structures across our India workforce, and protection of employees’ take-home salary, while allowing flexibility for tax efficiency.
TCS has consistently maintained a track record of awarding annual increments to its associate’s year-on-year, reinforcing its commitment to employee growth and long-term value creation,” a TCS spokesperson told Fe.
The wage revisions come after the company, during its fourth-quarter FY26 earnings last month, said annual increments would take effect from April 1. TCS Chief Human Resources Officer Sudeep Kunnumal had then said the company remained committed to investing in a future-ready workforce through experienced hiring and campus recruitment.
According to the company’s annual report, most employees were expected to receive hikes in the 4.5-7% range, while top performers could get increases of 10% or more. However, employee reactions on professional networking platform LinkedIn and online forums suggested significant variation in payouts across teams and performance bands.
A system engineer at the company said she received an increment of 1.8% despite securing a 4.2 rating out of 5, placing her in the B band categorised internally as “Good” or “Above Average”. The employee also alleged that another colleague in the same band had seen a 2% decline in salary after the revised compensation structure came into effect.
The employee, in a LinkedIn post, questioned the transparency and consistency of the appraisal process, saying the outcome had left many workers demotivated despite extended work hours, weekend shifts, office attendance compliance and upskilling efforts through certifications and training.
The development comes at a time when the IT services sector is navigating slower client spending, pressure on discretionary technology budgets and rising investments in artificial intelligence-led transformation. Wage hikes across the sector have moderated over the past two years compared with the sharp increases seen during the post-pandemic demand surge.
TCS ended FY26 with a headcount of 584,519 employees. The company has continued hiring from campuses while tightening utilisation targets and increasing focus on AI and automation-led delivery models.
The annual report also showed that CEO and Managing Director K Krithivasan received total remuneration of Rs 28.1 crore in FY26, up 6.3% from the previous year. His compensation was 332.8 times the median employee salary at the company.