Tata Consultancy Services (TCS), India's largest IT services company, has implemented an average salary hike of 5% for its employees, effective from April 1. However, several employees have reported that their net pay has decreased due to adjustments in variable pay components.
Salary Hike Details
The annual increment, which varies based on performance ratings, ranges from 2% to 8% for most employees. High performers may receive hikes of up to 12%, while those rated below expectations may see minimal or no increase. The company stated that the hike is part of its annual compensation review process.
Employee Concerns
Despite the announced hike, many employees on social media platforms like Blind and Reddit have claimed that their in-hand salary has reduced. This is attributed to TCS revising its variable pay structure, where a portion of the salary is now linked to performance metrics. Some employees reported a reduction of 10-15% in their take-home pay.
An employee from the company's Mumbai office said, "The hike is not reflecting in my salary slip. Instead, I see a cut due to variable pay adjustments." Another employee from Bengaluru noted, "My appraisal was 6%, but my net salary decreased by 3%."
Company Response
TCS has not officially commented on the pay cut claims. However, sources indicate that the variable pay component is based on individual and company performance, and the changes are part of a broader restructuring to align compensation with market standards.
The IT sector has been facing margin pressures due to global economic uncertainties, leading many companies to optimize costs. TCS reported a net profit of ₹11,936 crore for the quarter ending March 2025, with a revenue of ₹62,804 crore.
Industry analysts suggest that while the average hike is in line with industry trends, the variable pay adjustments could impact employee morale. "Companies are focusing on performance-based pay to manage costs, but transparency in communication is crucial," said an analyst at a leading consulting firm.
TCS employs over 600,000 people globally, and this salary revision affects a significant portion of its workforce. Employees are advised to check their compensation breakdown and raise concerns with HR if discrepancies arise.
