TCS Clears 4.5–7% Hike For Juniors After Delay, Seniors Excluded

India’s largest IT services firm has officially confirmed salary hikes for its junior and mid-level staff, ending months of speculation among employees. Effective from 1 September 2025, the increments will range between 4.5% and 7%, bringing relief to nearly 80% of the company’s workforce. While this decision comes after a five-month delay in the annual appraisal cycle, the revised compensation is being seen as modest compared with previous years, reflecting the broader headwinds facing the global IT industry.

Salary Revisions Announced After Delay

The technology giant usually rolls out its increment cycle in April, but this year’s revision was postponed due to weak global demand and wider economic uncertainties. The official confirmation was shared with employees through an internal communication from senior leadership. Those covered in this cycle include fresh graduates, associates, and professionals up to grade C3A, spanning roles with over a decade of experience. High performers within these categories may receive double-digit hikes, but overall, the increases are the lowest in recent years.

Employees Eligible For The Latest Cycle

The announcement clarified that the latest increment applies only to employees at junior and mid-level positions, while senior grades—C3B and above—will not see any revision this time. Importantly, the pay rise is not retrospective and will reflect directly in September payrolls. This move has provided clarity for a large section of the workforce, particularly those who were awaiting confirmation after rumours of lower-than-expected hikes circulated on internal forums.

Comparison With Previous Appraisal Years

In earlier financial years, salary increments were significantly higher. The average revision was between 6–9% in FY23, while FY22 saw increases of more than 10%. The current appraisal cycle, therefore, stands out for its relatively conservative approach. Analysts note that this reflects the caution IT companies are exercising in a market where technology spending has slowed and project deals have been delayed.

Layoffs Announced Alongside Increments

The pay hike announcement also comes at a time when the company is undergoing workforce restructuring. Plans have been confirmed to cut approximately 12,000 mid- and senior-level roles, representing around 2% of its total staff base of more than six lakh employees. The move, described by the firm as part of building a “future-ready organisation,” is being implemented alongside a new bench policy that limits unbilled time to just 35 days annually.

Industry-Wide Headwinds Continue

India’s $283 billion IT services industry has been grappling with rising inflation, tightening client budgets, and slower demand cycles in major markets such as the US and Europe. Attrition pressures have added to the challenge, with the firm’s attrition rate climbing to 13.8% in June, its highest in the past two years. In such an environment, the modest increments signal a careful balancing act between rewarding employees and maintaining financial discipline.

What This Means For Employees

For the majority of employees, the increments bring a sense of relief after months of uncertainty, though many acknowledge that the hikes are modest compared to rising living costs. Industry experts point out that while the raise may not feel substantial, it ensures stability in an environment where some peers in the sector have delayed or even frozen increments. The focus now shifts to whether demand recovers in the second half of the year, which could influence future salary revisions.