TCS (Tata Consultancy Services), India’s largest IT services provider, will implement annual salary increases for FY25 in March, with disbursements beginning in April. According to sources familiar with the matter, the increments are expected to range between 4-8%.
TCS has additionally connected its increments and variable payments to staff adherence to its recent return-to-office directive announced in early 2024. A staff member told ET, “We have been conveyed the hikes will be around 4-8%. The business verticals which have done well typically get more hikes but overall increments have not been too good.”
Previous increment averages at TCS were 7-9% in FY24 and 10.5% in FY22.
TCS Annual Pay Hikes
These new increments follow February’s quarterly variable pay release for the October-December period, with senior-level staff receiving reduced payouts between 20% to 40%.
Following the $254 billion IT sector’s growth patterns, yearly increments at leading companies have gradually decreased from double-digit figures during the high-growth Covid period to single digits in recent years.
The second-ranked Infosys has notified its staff that annual compensation revision letters will be distributed before March ends, with increments being finalised based on delivery unit recommendations. The expected range of increases is reportedly between 5-8%.
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TCS’s grade hierarchy begins at Y (trainees), progressing through C1 (systems engineers), C2, C3 – A&B, C4, C5 and CXOs. Senior category typically includes C3B and above bands. With business showing signs of recovery at TCS and other software firms, approximately 70% of staff, primarily those in C3 and below, received full variable pay.
Another employee with over eight years at TCS commented, “The hikes have been meagre each year for the past at least three-five years. It has been on the decline since the exit of former chief executive N Chandrasekaran.”
Chandrasekaran, currently Tata Sons chairman, led TCS from 2009 to 2017, during crucial growth periods for the outsourcing industry. Rajesh Gopinathan succeeded him until May 2023, followed by current leader K Krithivasan.
