TCS Employees Report Average 5% Salary Hikes, Some Experience Reductions Following Appraisal Cycle

Tata Consultancy Services Rolls Out Average 5% Salary Hike Amid Employee Concerns

Tata Consultancy Services (TCS), the Indian IT major, has announced an average salary hike of approximately 5 percent in its latest appraisal cycle. The development comes as employees have raised concerns about salary cuts, shrinking variable pay, and changes in compensation structures.

The latest employee concerns follow the company's previous announcement of annual salary hikes averaging 4.5-7 percent, with double-digit increments for top performers. Around 80 percent of employees were expected to receive revisions effective September 1. However, employees in the top-rated A+ category reported hikes ranging between 9 percent and 13 percent, while those in the A band largely reported increments between 5 percent and 9 percent.

Salary Hikes by Performance Band

Read also: SpaceX Seeks Record $75 Billion IPO, Potentially Positioning Elon Musk as the World's First Trillionaire

TCS employees are categorized into performance bands such as A+, A, B, and C during appraisals. Top bands typically receive higher salary increments and variable payouts. B band employees mostly reported hikes in the 1 percent-3.5 percent range, while many C band employees said their hikes were negligible or even negative.

The company has a total headcount of 584,519 employees. However, several sources claimed that compensation had actually been reduced after the latest restructuring. Some employees reported a reduction in their annual compensation by Rs 1,000-Rs 10,000, while others alleged that their revised compensation was lower due to structural changes in allowances and variable pay.

Concerns Over Salary Reduction and Variable Pay

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Employees have raised concerns about reduced take-home pay, lower variable payouts, and changes in salary structure after appraisal letters. Some employees reported that gratuity no longer appears in displayed CTC calculations, which could affect salary negotiations while switching jobs. Others alleged that performance-linked payouts are now tied to work-from-office compliance metrics and that monthly variable pay components have either reduced significantly or are being shifted to quarterly or annual payouts.

The appraisals also indicate the possible introduction of a new A+ performance bucket this year, with many employees reporting significantly higher hikes compared to regular A-band employees. Several sources suggested that the differential between the A+, A, B, and C bands had widened sharply in this cycle.

TCS did not immediately respond to Moneycontrol's queries regarding compensation restructuring or employee concerns around negative salary revisions. The story will be updated as and when the company responds.