In a major move that’s creating ripples across the IT sector, Tata Consultancy Services (TCS) has announced wage hikes for about 80% of its workforce, even as it prepares to lay off nearly 12,000 employees this year. The announcement was made via an internal email on August 6, 2025, and the salary revisions will take effect from September 1, 2025.

Let’s break down what this means for employees, the company, and the future of the IT industry.

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💼 Who Will Get the Hike?

According to the email sent by CHRO Milind Lakkad and CHRO Designate K Sudeep, the salary revision will apply to eligible associates in grades up to C3A and equivalent — this typically covers junior to mid-level employees. This group represents around 80% of TCS’s workforce, showing the company’s intention to retain and motivate the younger talent pool.

While the exact percentage of the hike hasn’t been disclosed, it’s a much-needed relief and a motivational boost for many employees amid uncertainty in the tech job market.

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📉 The Layoffs: A Tough Reality

At the same time, TCS has confirmed that it will be laying off about 2% of its global workforce, which amounts to approximately 12,000 employees. These layoffs are expected to affect mainly mid to senior-level professionals whose roles may no longer align with the company's evolving goals.

This workforce reduction is part of TCS’s strategy to become a “future-ready organisation,” focusing more on AI adoption, new technologies, and global market expansion.

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🎯 A Balancing Act: Rewarding and Realigning

TCS’s approach seems to be a dual strategy:

• Reward: By offering wage hikes to junior and mid-level staff, the company is attempting to retain young talent and boost morale.

• Realign: At the same time, the layoffs reflect a strategic workforce realignment, cutting down roles that may not contribute to the company’s AI-driven, tech-forward vision.

This balancing act shows how companies are trying to navigate the changing tech landscape, especially with the rise of AI, automation, and cost pressures from global economic uncertainty.

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🌍 The Bigger Picture: Is IT Headed for a Reset?

The TCS layoffs and restructuring reflect a wider industry trend. Many Indian IT companies have reported slow revenue growth in the first quarter of FY26. Unstable macroeconomic conditions, geopolitical tensions, and the impact of U.S. tariffs on outsourcing have delayed decision-making among global clients.

With AI rapidly transforming how businesses operate, reskilling, automation, and leaner teams seem to be the future. The focus is now on efficiency, technology investments, and delivering faster results with fewer resources.

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📌 What Should Employees Expect?

For those working in IT — especially in mid to senior-level roles — this news is a clear signal:
✅ Keep reskilling
✅ Stay updated with AI and digital trends
✅ Be prepared for rapid changes in the job landscape

On the other hand, junior professionals and freshers may find new opportunities opening up, as companies like TCS focus on nurturing young, agile talent.

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🔚 Conclusion

TCS’s wage hikes for 80% of its employees, even as it plans major layoffs, underline a critical shift in the IT industry. It’s no longer just about headcount — it’s about being future-ready, tech-savvy, and cost-efficient. As the industry goes through this transformation, companies and professionals alike must adapt quickly to stay ahead.

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