In a surprising yet strategic move, Tata Consultancy Services (TCS) has announced salary increments for around 80% of its employees while simultaneously planning to lay off over 12,000 mid- and senior-level employees—roughly 2% of its global workforce.
A Closer Look at the Wage Hikes
- Effective Date: The salary hikes will come into effect from September 1, 2025.
- Who’s Getting a Raise: Employees up to grade C3A (assistant consultants and equivalent roles) will benefit from this increment. This group constitutes the junior and mid-level segment, covering a major portion of the company’s employee base.
- Delayed but Delivered: Originally expected in April, the salary revisions were postponed due to global macroeconomic challenges and weak demand in key markets.
The Layoff Plan
While rewarding a large section of the workforce, TCS is also executing a downsizing exercise, planning to lay off approximately 12,000 employees, mostly from middle and senior management roles. The move is part of the company’s ongoing strategy to become a more future-ready and agile organization by embracing automation, AI, and newer business models.
Why This Dual Move?
- Retaining Young Talent The company aims to retain and motivate its younger workforce, which is critical for driving long-term growth and innovation.
- Operational Efficiency By reducing the top-heavy structure, TCS is preparing to optimize its operations and reduce decision-making lag, making way for faster execution.
- Adapting to Market Shifts As client priorities shift towards AI, digital transformation, and cost-efficiency, TCS is realigning its internal structure to stay competitive in the evolving global tech market.
What It Means for Stakeholders
- Employees: Junior and mid-level employees receive a morale boost with increments, while senior roles face restructuring uncertainties.
- Industry Impact: TCS sends a strong message to the industry by balancing financial prudence with employee-centric measures.
- Future Outlook: This approach could become a blueprint for other IT majors navigating cost pressures and digital disruption.
Final Thoughts
TCS’s latest move—granting wage hikes to 80% of its workforce while letting go of thousands of senior employees—is a bold attempt to balance talent retention with structural realignment. This dual approach reflects the changing dynamics of the global IT services sector, where agility, efficiency, and young talent are becoming increasingly central to growth.
