TCS Salary Hike: What India’s Top IT Company Said After Q1 Results 2025
TCS salary hike: India’s largest IT company, Tata Consultancy Services (TCS), has yet to finalize its decision on employee salary increments for the current financial year. Despite reporting strong Q1 earnings for FY2025-26, the company has maintained a cautious stance on pay hikes due to prevailing uncertainties in the business environment. Speaking at the Q1 earnings press conference, Chief Human Resources Officer (CHRO) Milind Lakkad stated that no concrete decision has been made regarding the salary hike for its 6.13 lakh employees.
No Clear Timeline Yet on TCS Salary Hike
When asked about the much-anticipated salary hike, Milind Lakkad stated: “With respect to wage hikes, we have not made any decisions so far.” The update—or rather the lack thereof—has left employees speculating about the timeline for increments, especially since TCS had already deferred wage revisions in the previous quarter citing an “uncertain environment.” Lakkad previously noted that the decision could be taken anytime during the year, depending on the business outlook.
This cautious approach aligns with the overall strategy of Indian IT majors facing macroeconomic headwinds, fluctuating demand, and global market uncertainty. However, it also raises questions about employee morale and retention, especially at a time when talent movement is rising.
TCS Q1 Results Reflect Stable Growth
Despite the delay in salary hikes, TCS showed resilience in its Q1 FY2025-26 financial performance. The company posted a 6% year-on-year rise in net profit, reaching ₹12,760 crore compared to ₹12,040 crore in the same period last year. Consolidated revenue from operations also saw a 1.3% increase, totaling ₹63,437 crore for the April-June quarter, compared to ₹62,613 crore in Q1 of FY2024-25.
While the numbers were modest, they signal stability in TCS’s core business verticals, including BFSI, retail, and manufacturing. The company also continued investing in digital transformation projects, with demand remaining steady in key geographies like North America and Europe.
Attrition Rate Rises Despite Hiring Spree
A key highlight from the Q1 report was the rise in the company’s attrition rate, which hit 13.8% on a last-twelve-month basis, up from 13.3% in the previous quarter. This marks a two-year high for TCS and exceeds its internal comfort level of 13%. Addressing this, Milind Lakkad said:
“Attrition is higher than our comfort level. We are making efforts to bring it down.”
Despite the attrition uptick, TCS increased its total headcount by more than 5,000 employees during the quarter. The total number of employees stood at 613,069, up from 607,979 in Q4 FY2024-25. This move is seen as an attempt to stay ahead of project demands and pipeline expectations amid ongoing digital transformation mandates across industries.
Uncertain Business Climate Driving Wage Strategy
TCS had earlier deferred salary hikes at the end of FY2024-25. At that time, Milind Lakkad said the decision on hikes would be made dynamically during the year depending on how business evolves. This flexible approach, while justifiable from a fiscal prudence standpoint, is being closely monitored by employees.
The IT sector has been witnessing increased pressure to balance profitability with employee retention. Experts suggest that delaying increments might save short-term costs but could also lead to higher attrition, especially with growing demand for skilled tech talent.
Indian IT Sector Outlook: Growth with Challenges
The Indian IT industry continues to be a pillar of the country’s economy, contributing significantly to exports, job creation, and GDP. According to the Indian Brand Equity Foundation (IBEF), the IT sector reached $227 billion in FY2021-22, growing 15.5% YoY, and was estimated to hit $245 billion in FY23.
Industry projections also highlight that the software product industry in India could reach $100 billion by 2025, driven by increasing investments in global delivery centres and expansion into new geographies. Cloud computing, artificial intelligence, and data analytics remain the major growth engines.
With the rise in digital adoption, the sector is expected to create 14 million new jobs by 2026 and contribute $380 billion to India’s GDP, underlining its long-term growth potential.
What Lies Ahead for TCS Employees?
While TCS’s financials remain stable and its hiring trend remains positive, the delayed TCS salary hike has cast a shadow over employee sentiment. As the company navigates uncertain global markets, the pressure is building internally to reward and retain its workforce.
If business conditions improve in the upcoming quarters, a mid-year increment could still be on the table. For now, TCS employees await clarity from leadership, while industry watchers look to see if the firm follows the lead of peers who may announce pay hikes in the second half of the fiscal year.
Final Word
TCS salary hike remains a key topic for both employees and industry analysts as the IT major walks a tightrope between fiscal caution and talent retention. With modest but stable Q1 performance and a rise in headcount, the company appears positioned to announce hikes—if market conditions permit.
Until then, TCS continues to bet on its long-term strategy and global expansion to weather short-term headwinds.
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