TCS announces salary hikes of up to 7% amid attrition rise
MUMBAI, INDIA — Tata Consultancy Services (TCS) has initiated salary increments for its workforce, effective September 2025. According to a report by Mint, the move comes as TCS contends with a rising attrition rate that has reached a two-year high.
Modest hikes implemented, top performers rewarded
After a two-month deferral due to uncertain market conditions, TCS has finalized salary increments ranging from 4.5% to 7% for the majority of its lower and middle-level employees.
The company began distributing increment letters on September 1, making the pay raises effective from this month. This decision follows statements from Executive Vice President (EVP) and Chief Human Resources (HR) Officer Milind Lakkad in July, who said no decisions on wage hikes had been made during the company’s quarterly press conference.
Salary increments of more than 10% were given to high achievers in the organization as a way of rewarding and maintaining key talent in the competitive environment.
Attrition rises above TCS’s comfort level
The implementation of salary increases is done against the backdrop of an increasing workforce problem facing the IT giant.
The attrition rate in the April to June quarter increased to 13.8% on a last-twelve-month basis, compared to 13.3% at the end of the last financial quarter. This number represents a slight improvement over the same period the previous year.
Company leadership has openly acknowledged that this level of attrition is a significant problem. Lakkad stated the rate was more than its comfort level of 13% and confirmed the company is working on it, saying, “We are making efforts to bring it down.” The salary increments are a central part of these retention efforts aimed at stabilizing the workforce.
The company ranked #8 in the OA500 2025, an objective index of the world’s top 500 outsourcing companies.
