TCS Follows Infosys: Salary Hike Letters Coming Soon – What to Expect

India’s largest IT services company, Tata Consultancy Services (TCS) is gearing up to distribute salary hike letters for the financial year 2025. News reports indicate that the increments will range between 4%-8%, with revised salaries expected to be reflected in April 2025.

This announcement comes shortly after Infosys, another IT giant, declared that its employees would receive their salary increments by the end of February 2025. The development highlights a shift in salary trends across the IT sector, as companies navigate economic headwinds and changing business dynamics.

IT Industry’s Shift from Double-Digit Hikes

The IT sector has witnessed a decline in salary hikes from the double-digit growth rates seen during the COVID-19 period. In FY22, TCS offered an average hike of 10.5%, whereas in FY24, the increments were 7-9%. The latest salary revision for FY25 is expected to be even lower, reflecting the broader trend of cost optimisation within the industry.

As of February 18, 2025, TCS holds a market capitalisation of ₹14.02 lakh crore, reinforcing its position as India’s largest IT company.

Salary Hikes Tied to Return-to-Office Compliance

One of the key factors influencing salary increments this year is compliance with the return-to-office (RTO) mandate. TCS has reportedly linked salary hikes and variable pay to employees’ adherence to its hybrid work policies. Employees who have followed the RTO policy are more likely to receive higher increments, indicating a shift in corporate priorities towards workplace presence.

In February 2025, TCS also released its quarterly variable pay (QVP) for the October-December quarter. While many junior and mid-level employees received 100% of their variable pay, senior employees saw lower payouts, ranging between 20-40%.

A Changing Landscape for IT Salaries

With global economic conditions remaining uncertain and companies prioritising cost efficiency, salary increments in the IT sector are expected to remain conservative in the near future. The trend suggests that performance-based pay, adherence to workplace policies, and overall industry health will play a crucial role in determining employee compensation going forward.

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