TCS Hikes Salaries Up To 7%, Employees Say Compensation Changes Hurt Pay

TCS has rolled out annual salary hikes ranging between 4.5 per cent and 7 per cent for most employees, but the latest compensation cycle has also sparked discontent among some workers.

While the company says the restructuring aligns pay with new labour codes and protects take-home salaries, several employees claim the revised structure has reduced their effective earnings despite positive performance ratings.

Source : ABP Live

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Key points generated by AI, verified by newsroom

• TCS rolled out annual salary hikes, most increments between 4.5-7%.
• Compensation restructuring aligns with new labour codes.
• Some employees report reduced effective salaries despite good performance.

Tata Consultancy Services (TCS), India’s largest IT services company, has rolled out annual salary hikes for employees, with most increments ranging between 4.5 per cent and 7 per cent. 

However, even as the company positions the move as part of its long-standing commitment to employee growth, some workers claim the revised compensation structure has reduced their effective salaries despite receiving positive performance ratings.

The development has triggered conversations across LinkedIn and employee forums, where several workers have questioned the transparency of the appraisal process and the impact of the company’s compensation restructuring.

Annual Increments Rolled Out Across Workforce

TCS had earlier announced during its fourth-quarter FY26 earnings that annual increments would come into effect from April 1, reported The Financial Express.

Confirming the rollout, a TCS spokesperson said the company had implemented annual salary revisions for eligible employees while also completing a restructuring of compensation for India-based staff in line with upcoming labour codes.

“In line with the announcement made during our Q4 earnings, we have rolled out annual increments to eligible employees. Additionally, we have completed the restructuring of compensation for all our India-based employees to align with the new labour codes,” the spokesperson told FE.

The company said the revised salary structure was guided by three key principles: compliance with the new labour codes, standardisation of wage structures across the Indian workforce, and protection of employees’ take-home salary while maintaining flexibility for tax efficiency.

“TCS has consistently maintained a track record of awarding annual increments to its associates year-on-year, reinforcing its commitment to employee growth and long-term value creation,” the spokesperson added.

Top Performers Expected to Receive Higher Hikes

According to TCS’ annual report, most employees were expected to receive salary hikes in the 4.5-7 per cent range.

Top performers, meanwhile, were expected to receive increments of 10 per cent or more.

TCS Chief Human Resources Officer Sudeep Kunnumal had earlier said the company remained committed to investing in a future-ready workforce through both experienced hiring and campus recruitment.

Employees Raise Concerns Over Compensation Changes

Despite the official announcement, reactions from some employees suggest that the actual impact of the salary revisions has varied significantly across teams and performance bands.

One system engineer claimed she received an increment of just 1.8 per cent despite securing a performance rating of 4.2 out of 5, placing her in the company’s internal B band categorised as “Good” or “Above Average”.

The employee also alleged that another colleague in the same band had witnessed a 2 per cent reduction in salary after the revised compensation structure came into effect.

In a LinkedIn post, the employee questioned the consistency of the appraisal system, arguing that many workers had continued putting in extended hours, weekend shifts, office attendance and upskilling efforts through certifications and training despite slower growth in payouts.

Why IT Salary Hikes Are Slowing Down

The wage revisions come at a time when India’s IT services industry is facing a more challenging business environment.

Technology companies are dealing with slower client spending, pressure on discretionary technology budgets and rising investments in artificial intelligence-led transformation.

As companies increase focus on automation and AI-driven delivery models, salary hikes across the sector have moderated compared with the sharp increases seen during the post-pandemic hiring boom.

TCS, which ended FY26 with a workforce of 584,519 employees, has continued campus hiring while also tightening utilisation targets and increasing focus on AI and automation.

Executive Compensation Also Increases

The company’s annual report also showed that Chief Executive Officer and Managing Director K Krithivasan received total remuneration of Rs 28.1 crore in FY26, marking a 6.3 per cent increase from the previous year.

According to the report, his compensation stood at 332.8 times the median employee salary at the company.