Tata Consultancy Services (TCS), India's largest IT services company, will announce annual salary increases for FY25 in March, with payouts beginning in April. The increases will likely range between 4-8%.
Infosys, ranked second, has informed employees that annual compensation revision letters will be issued by the end of March, and that hikes are being considered based on recommendations from delivery units. According to reports, the increases will likely be between 5 and 8%.
In line with the $254 billion IT industry's growth trends, annual increases at most top-tier majors have gradually slowed from double digits during the Covid period of high growth to single digits in recent years.
Furthermore, TCS has linked raises and variable payouts to employees' compliance with its recent return-to-office (RTO) mandate, which was announced in early 2024. "We have been informed that the hikes will be around 4-8%. The business verticals that have performed well typically receive more raises, but overall increments have not been particularly generous," an employee stated. TCS did not respond to inquiries. The average increase was 7-9% in FY24 and 10.5% in FY22.
TCS's latest increases will follow the quarterly variable pay (QVP) announced in February for the October-December period to its eligible employees, with senior-level employees continuing to receive lower payouts ranging from 20% to 40%.
The grade structure at the Tata subsidiary begins with Y (trainees) and progresses to C1 (systems engineers), C2, C3 - A&B, C4, C5, and CXOs. Employees in the C3B and above band are most likely considered senior. Amid a gradual revival in business at TCS and other software service providers, approximately 70% of Tata employees received 100% of their variable pay, with the majority falling into the C3 and below category.
"The hikes have been meagre each year for the past at least three-five years," said another employee who has been with TCS for more than eight years. "It has been on the decline since the exit of former chief executive N Chandrasekaran."
