In a surprising move, Tata Consultancy Services (TCS) has announced wage hikes for 80% of its workforce, even as the company prepares to lay off around 12,000 employees this year. The hike, which will benefit mid- to junior-level employees, will take effect from September 1, 2025, according to an internal email sent to staff by Chief Human Resources Officer Milind Lakkad and CHRO-designate K Sudeep.

The announcement comes at a time of growing unease in the Indian IT sector, as global macroeconomic instability, rising U.S. tariffs, and the disruptive impact of AI have triggered waves of uncertainty. Despite these headwinds, TCS’s move to offer compensation revisions has been positioned as a gesture of gratitude and talent retention amid a period of transformation.

“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,” the email stated. While the exact size of the hike has not been disclosed, the company emphasized its appreciation for employees' dedication and hard work as it “builds the future of TCS together.”

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In an official statement to the press, the company confirmed the development: “We will be issuing wage hikes to around 80 per cent of our employees effective 1st September 2025.” However, the announcement is overshadowed by TCS’s earlier disclosure of plans to lay off 2% of its global workforce, primarily targeting mid- and senior-level employees.

The company framed the layoffs as part of a larger mission to become a “future-ready organisation”—with strategic shifts that include heavy investments in AI, next-gen tech infrastructure, new market entries, and talent realignment. “A number of reskilling and redeployment initiatives have been underway,” the company said, adding that layoffs were unavoidable where redeployment wasn’t feasible.

The dual announcement—of raises for some and pink slips for others—has ignited debates across the tech industry. Analysts view this as part of a broader reset for the IT sector, which is facing declining revenues and delayed client decision-making. In the first quarter of FY26, India’s top IT players, including TCS, reported single-digit growth, painting a sobering picture for what was once the country’s fastest-growing sector.

With the September hikes on the horizon and a large workforce facing exit, TCS’s balancing act between retaining talent and redefining operations is being closely watched—not just by employees, but by the entire IT ecosystem navigating a volatile global landscape.

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