Tata Consultancy Services Ltd has implemented salary hikes of up to 6% for top performers, with the company rolling out wage increases for all eligible employees from 1 April. According to reports from Mint, top performers received hikes of up to 6%—compared to 4.5-7% on average last year—while those rated poorly faced salary deductions. The company rates employees in bands with top performers marked with an A+ band and lowest-ranked performers given the D band.
Just one month after completing its biggest-ever retrenchment, laying off roughly 12,200 people, TCS has asked managers to flag 5% of its 584,519 employees as Band D—the lowest performance category. As reported by Jas Bardia, about 17,500 people are now sitting in that uncomfortable zone, wondering if they are next. An executive who received a D rating last year explained that such employees receive reduced variable pay, are pulled off projects, and placed on a two-month performance improvement plan. If they don't improve, they are shown the door.
TCS has shifted work-from-office-linked variable pay from the performance bonus component to a monthly performance pay category tied to attendance and deployment metrics. As reported by Mint, the company's compensation letter to an employee states: "You will be eligible for a performance pay of up to ₹64,800 per annum based on your individual performance and other organisational imperatives like Work From Office Index (WFO), Deployment Index (DI), etc." Performance bonus, which was paid quarterly earlier, might now be paid on an annual basis and is no longer linked with office attendance.
Several employees expressed dissatisfaction with the revised salary structure, with one executive stating: "I have been a top performer for two years. I was given the A-band this time around, but still I only got a 6% hike in salary." According to Mint, employees are unhappy with marginal increases in basic pay and the scrapping of benefits including house rent allowance, meal coupons, fuel and travel allowances. The new salary structure also scraps several allowances, sets gratuity apart from the total salary package, and ties performance pay to office attendance—a pointed nudge at a time when remote work conversations are far from over.
These salary hikes come at a time when automation tools are impacting IT services companies, with TCS ending last year with $30.02 billion in revenue, down 0.5% year-on-year, marking its first revenue decline. As reported by Mint, TCS's peers including Infosys Ltd have not yet decided on the timing and quantum of salary hikes, while Wipro had rolled out salary increases from 1 March. The company has issued hikes for employees up to C3A level and is yet to roll-out wage hike letters to senior employees. With revenue falling 0.5% in FY26, its first-ever decline since listing, and AI reshaping client demand, TCS is squeezing costs through these comprehensive salary restructuring measures.
