TCS is set to roll out its annual salary hikes for the fiscal year 2026 in March, with the average increases ranging between 4 per cent and 8 per cent.
IT services major Tata Consultancy Services (TCS) is set to roll out its annual salary hikes for the fiscal year 2025 in March, with the average increases ranging between 4 per cent and 8 per cent, according to a report by Economic Times. The payouts, it added, are expected to start from April 2025. TCS is not the only IT giant announcing salary hikes.
Infosys had, earlier, informed its employees that it will issue compensation revision letters before the end of March. Infosys, finalising salary increases based on recommendations received from delivery units, is expected to announce hikes in the range of 5-8 per cent. The company had paused salary hikes in both FY22 and FY23 to cut costs. Earlier in January, Infosys had informed that its total employee count stood at 323,379 in Q3FY25, compared to 322,663 employees in the same quarter a year ago.
This is noteworthy with IT firms, over the years, witnessing a gradual reduction in annual salary hikes. During the Covid-19 period, hikes by IT companies were often in double digits while it has dropped to single digits in the last two years.
How will TCS employees be rewarded?
TCS has linked salary hikes and variable pay to employees’ compliance with its return-to-office (RT) policy which was introduced in early 2024. The company has mandated a five-day office workweek for most employees.
The IT firm had, in February, released its quarterly variable pay (QVP) for the October-December period for eligible employees. Per this, while many junior and mid-level employees will receive 100 per cent of their variable pay, senior employees will continue to receive lower payouts ranging from 20 to 40 per cent.
At TCS, employees are categorised under different grades, starting from Y (trainees), C1 (systems engineers), C2, C3-A & B, C4, C5, and CXOs. Employees at C3B and above are considered senior-level staff.
A report by SightsIn Plus stated that offsite employees can expect a hike of 7-8 per cent, while onsite employees may receive a lower increment of 2-4 per cent. High-performance employees could see salary increases ranging from 12-15 per cent, it added.
Salary hike trend at TCS
Considering the past hikes, this is the lowest average salary hike by TCS in the last four years. In FY24, TCS employees received a 7-9 per cent increase, while FY23 saw 6-9 per cent, down significantly from the average hike of 10.5 per cent in FY22.
In January, TCS had reported a net decline of 5,370 employees in the October-December quarter, amid a challenging quarter for the company, with subdued performance in key markets, including North America. The company’s total workforce now stands at 607,354.
During the quarter, TCS also reported a marginal rise in attrition, with the rate increasing to 13 per cent in Q3 from 12.3 per cent in the previous quarter.
However, Milind Lakkad, Chief Human Resources Officer, TCS, had said that the IT major remains on track with its plan to hire 40,000 freshers in FY25 and anticipates increasing campus hiring in the next fiscal year. He further added that promotions have also been a key focus, with more than 25,000 associates promoted during Q3, bringing total promotions for FY25 to over 110,000 – nearly 20 per cent of its workforce.
Source: Financial Express