Mumbai, India – In a mixed move for employees, Tata Consultancy Services (TCS) has announced salary increases for 80% of its workforce, primarily benefiting junior and mid-level professionals, even as the company prepares for a restructuring that could lead to 12,000 layoffs. The decision reflects TCS’s strategy to retain key talent while optimizing operations in a challenging global IT market.Tata Consultancy Services (TCS), India’s largest IT services company, has rolled out salary hikes for nearly 80% of its global workforce, even as it undertakes a major organizational restructuring aimed at driving efficiency and agility. The move comes at a time when the Indian IT industry is navigating global demand uncertainties, U.S. tariff pressures, and rapid technological shifts.
According to company insiders, the salary increments range between 5-8% for employees in India, with higher adjustments for high performers and niche skill holders. For overseas employees, hikes are calibrated based on local market benchmarks. TCS, which employs more than 600,000 professionals worldwide, said the decision underscores its commitment to retaining talent and motivating employees despite ongoing structural realignments.
The company recently initiated a cluster-based restructuring, consolidating verticals such as banking, retail, manufacturing, and technology into tighter operational units. This is designed to streamline decision-making, strengthen client engagement, and accelerate delivery in growth areas like cloud computing, artificial intelligence, and cybersecurity.
Industry experts view the salary hike as a strategic morale booster at a time when attrition levels in the IT sector remain elevated, and global clients are tightening technology budgets. “TCS’s move signals stability to its employees and clients. By rewarding its workforce during restructuring, the company is positioning itself as an employer of choice while preparing for long-term transformation,” said a Bengaluru-based IT analyst.
For TCS, employee costs form nearly 55% of its operating expenses, making the pay hike a significant financial commitment. However, the company expects to balance this through improved operational efficiency and higher-value deals. In FY25, TCS secured multiple large contracts in generative AI, digital engineering, and enterprise cloud, helping offset challenges in traditional outsourcing businesses.
The announcement also comes as rival IT majors like Infosys and Wipro have either deferred hikes or rolled them out selectively. TCS’s decision could pressure competitors to follow suit, especially as talent wars intensify in Tier-2 cities.
By pairing restructuring with employee-friendly policies, TCS is betting on a future-ready workforce to maintain its leadership in the $224.4 billion Indian IT export market.
🔍 Key Details of TCS’s Salary & Restructuring Plan
📈 Salary Increases
✔ 80% of employees eligible for raises (mostly junior/mid-level)
✔ Average hike expected at 6-8% (top performers may get 12-15%)
✔ Focus on digital skills – AI, cloud, and cybersecurity roles prioritized
🔄 Restructuring & Layoffs
⚠ Up to 12,000 jobs at risk (mostly in legacy support roles)
⚠ Performance-based cuts – Low utilization & skill gaps driving exits
⚠ Voluntary separation scheme likely to be offered
💡 Why the Dual Approach?
- Retain high-potential talent in growth areas (AI, GenAI, automation)
- Reduce costs in declining service lines (traditional IT maintenance)
- Align with global demand – Clients shifting to cloud & AI-driven solutions
🌍 Industry Context: IT Sector’s Shifting Trends
✅ Demand for AI/cloud skills surging, while legacy roles shrink
✅ Indian IT giants (Infosys, Wipro, HCL) also restructuring workforces
✅ Global slowdown in discretionary tech spending affecting hiring
📊 How TCS Compares to Peers
| Company | Salary Hikes (2025) | Layoffs Expected | Focus Areas |
|---|---|---|---|
| TCS | 80% staff (6-8% avg) | ~12,000 | AI, cloud, cybersecurity |
| Infosys | 70% staff (5-7% avg) | ~8,000 | Generative AI, automation |
| Wipro | 65% staff (4-6% avg) | ~5,000 | Cloud modernization |
💬 Employee & Analyst Reactions
“The hikes are a relief, but uncertainty looms for those in legacy roles. Upskilling is now mandatory to survive in IT.”
— TCS Mid-Level Engineer
“This is a classic workforce rebalancing—investing in future skills while trimming fat in outdated functions.”
— IT Sector Analyst, Bernstein
⚠ Challenges Ahead for TCS
- Employee morale – Layoffs could hurt retention despite hikes
- Global competition – Accenture, Capgemini aggressively hiring AI talent
- Economic pressures – Clients delaying non-critical projects
🔮 What’s Next?
- July-August 2025 – Hike payouts & restructuring details finalized
- 2025-26 – Accelerated reskilling programs for legacy staff
- Long-term – TCS likely to hire more in AI/cloud than it cuts in legacy roles
🤔 Will this strategy help TCS stay ahead in the AI era? While salary hikes boost morale, the real test will be how smoothly it transitions employees to high-demand skills.
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