TCS to roll out wage hikes for about 80% of employees, effective September 1

The wage hikes come at a time when TCS is set to lay off about 12,000 employees this year.

The wage hikes will be effective September 1, TCS CHRO Milind Lakkad and CHRO Designate K. Sudeep said in an email to employees on Wednesday.

"We are pleased to announce a compensation revision for all eligible associates in grades up to C3A and equivalent, covering 80 per cent of our workforce. This will be effective 1st September 2025," says the email seen by PTI.

The email goes on to say, "We would like to thank each one of you for your dedication and hard work, as we build the future of TCS together."

The extent of wage hikes could not be immediately ascertained.

When reached for comment, the company in a statement said, "We can confirm that we will be issuing wage hikes to around 80 per cent of our employees effective 1st September 2025."

The move to reward and retain talent comes at a time when TCS has decided to lay off over 12,000 employees as part of what it describes as a broader strategy to become a "future-ready organisation". This entails a focus on investments in technology, AI deployment, market expansion, and workforce realignment, according to the company.

"TCS is on a journey to become a future-ready organisation. This includes strategic initiatives on multiple fronts, including investing in new-tech areas, entering new markets, deploying AI at scale for our clients and ourselves, deepening our partnerships, creating next-gen infrastructure, and realigning our workforce model," the company had said last month as the news of layoffs shook the IT industry.

"Towards this, a number of reskilling and redeployment initiatives have been underway. As part of this journey, we will also be releasing associates from the organisation whose deployment may not be feasible. This will impact about 2 per cent of our global workforce, primarily in the middle and the senior grades, over the course of the year," TCS had then said.

The layoffs at TCS have, in fact, ignited larger conversations on whether or not the IT industry itself may be headed for a major reset amid turbulence from global macro uncertainties, the impact of the US' crushing tariffs on overall outsourcing sentiments, and the AI-led disruptions.

As it is, India's top IT services companies have delivered single-digit revenue growth in Q1 FY26, capping off a somewhat-sobering June quarter as macroeconomic instability and geopolitical tensions have weighed on global tech demand and delayed client decision-making.

TCS Q1 FY26 Results

TCS, on Thursday, July 10, reported a net profit of ₹12,760 crore for the first quarter of the current financial year (Q1 FY26), marking an upside of 6% from ₹12,040 crore logged in the same period last year.

On a sequential basis, TCS' net profit advanced 4.38% from ₹12,224 crore. The profit numbers were better than HSBC estimates, as analysts at the investment firm were expecting the country's third-largest company by market capitalisation to report a net profit of ₹11,925 crore.

Its revenue from operations advanced 1.3% to ₹63,437 crore as against ₹62,613 crore seen in the year-ago period. The company's revenue in constant currency (CC) terms, however, declined 3.1%.

The company's operating margin in the first quarter expanded by 30 basis points to 24.5%.

Besides, the company admitted that it was experiencing a "demand contraction" due to the continuing uncertainties on the macroeconomic and geopolitical fronts and added that it does not see a double-digit revenue growth in FY26.

Speaking to reporters at its office in Mumbai, the managing director and chief executive officer (CEO), K. Krithivasan, explained the delays in decision-making experienced in the preceding quarter have "intensified" now and hoped for the discretionary spends – a prime mover of revenue growth for IT companies – to return once the uncertainties ebb.