TCS salary hike and layoffs 2025: TCS to hike salaries for 80% of staff even as it lays off 12,000 employees in global restructuring.
India’s largest IT services company, Tata Consultancy Services (TCS), has announced wage hikes for 80% of its workforce, even as it moves ahead with the layoff of over 12,000 employees globally and in an internal email dated August 6, 2025, TCS confirmed that the compensation revision will apply to employees in grades up to C3A and equivalent, largely covering mid to junior-level staff.
The hikes will take effect from September 1. The dual announcement reflects TCS’ broader restructuring strategy—investing in future technologies, expanding markets, deploying AI at scale, and reshaping its workforce model.
The email from TCS CHRO Milind Lakkad and CHRO Designate K Sudeep expressed appreciation for employees and assured them of the company's continued commitment to talent recognition and the company stated that eligible employees would receive the revised pay from next month. However, the extent of the pay increase has not been officially disclosed.
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This comes at a time when the IT sector is facing slowing revenue growth, macroeconomic headwinds, and growing concerns about the future of outsourcing in the face of U.S. tariffs and rising automation.
While rolling out salary hikes for a large section of the staff, TCS is simultaneously proceeding with layoffs impacting 2% of its global workforce. The company has confirmed that most of these layoffs will occur in the middle and senior grades over the course of the year. TCS said this restructuring is necessary to transform into a “future-ready organization.”
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The company has been undertaking reskilling and redeployment initiatives but acknowledged that some roles cannot be realigned. Therefore, employee exits are inevitable. The move sparked debates within the IT community about the sector's direction, especially as AI adoption accelerates.
TCS says its transformation is driven by the need to invest in AI, expand into new markets, build next-generation infrastructure, and deepen global partnerships. This dual policy—rewarding performers while letting go of non-aligned roles—shows the balancing act the company is attempting during a turbulent time for the tech industry.
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With global tech demand weakening and decision-making cycles slowing, the June quarter (Q1 FY26) saw single-digit revenue growth among India’s top IT firms. TCS appears to be bracing for more changes, both structurally and culturally, in order to remain competitive in a rapidly shifting global landscape.
