After a five-month delay, Tata Consultancy Services (TCS), India’s largest IT company, has announced annual salary increments for the previous financial year ending March 2025. Employees in junior to mid-level bands (fresher to grade C3A) will receive raises ranging from 4.5% to 7%, while high performers can expect payouts above 10%, people familiar with the matter told ET.

The hikes are among the lowest in the last four years, reflecting a slowing IT business environment. While average increments were 4.5-7% in FY24, they stood at 6-9% in FY23 and 10.5% in FY22.

Salary Revision Effective From September 1

Typically rolled out in April, the latest round of hikes will be effective starting September 1. Senior-level employees in bands C3B, C4, and C5 are not included. “The hikes will not be paid on a retrospective basis and will be received by employees starting from the September month salary rollout,” one source told ET.

An internal email dated August 6, shared with employees by TCS CHRO Milind Lakkad and CHRO designate K Sudeep, stated: “We are pleased to announce a compensation revision for all eligible associates in grades up to C3A and equivalent, covering 80% of our workforce. This will be effective 1st September 2025.”

Layoffs and Workforce Challenges Continue

The hike comes amid ongoing workforce changes, as TCS plans to lay off around 2% of its six-lakh workforce—over 12,000 mid- and senior-level staff—in the current fiscal year. As of June, TCS employed 613,069 people.

The cautious approach by TCS reflects wider industry trends, with muted revenue growth, delayed client decisions, and concerns over tariffs and AI-driven transformations impacting operations. TCS also introduced a new bench policy in June, allowing employees a maximum of 35 days annually without project allocation, targeting 225 billed business days per year.

The workforce decisions have sparked pushback from employees and unions, while drawing scrutiny from the Centre’s labour and employment ministry and Karnataka’s labour department.