TCS says layoff cycle is over, returning to its standard salary increment cycle
TCS has said its layoff cycle is now over and the company is returning to its standard salary increment cycle after a year of restructuring. The move comes as the IT giant looks to build on deal momentum and improve growth in the coming year.
Tata Consultancy Services (TCS) has said that its layoff cycle is now over and it will return to its standard salary increment cycle. The update comes after a year when the company went through workforce changes and cautious decision-making amid a slower demand environment. The move is expected to bring some relief to employees who have been dealing with uncertainty around pay hikes and job stability.
TCS had earlier announced plans to reduce around 2 per cent of its workforce as part of a restructuring exercise. Along with tighter bench policies, this led to exits, especially in the mid and senior-level roles. The company has now confirmed that this phase is complete, and it is moving ahead with its usual processes, including annual salary revisions. If reports are to be believed, the top performers at TCS generally receive double-digit hikes, while general increments for the majority of staff usually range between 4.5 per cent to 7 per cent based on performance ratings and grade.
Hiring continues even as headcount declines
Even though the company reported a drop of more than 23,000 employees in FY2026, it has maintained that the fall in numbers is not entirely linked to layoffs. The company's Chief Human Resources Officer Sudeep Kunnumal told The Times of India that TCS continues to invest in fresh talent and remains one of the biggest recruiters in the country. The company has already rolled out 25,000 campus offers in India and is on track to hire around 40,000 freshers annually. In the previous year, it had onboarded 44,000 trainees.
TCS also added over 2,300 employees in the fourth quarter on a sequential basis through a mix of lateral hiring and fresher intake. This suggests that while overall headcount has come down on a yearly basis, hiring activity has not stopped. The company, however, has not shared a hiring target for FY2027 so far.
CEO K Krithivasan said that the company is entering the new financial year with positive momentum after facing some pressure earlier. He acknowledged that there was a decline in the first quarter due to the completion of a large transformation programme, but added that the company reported growth in the following three quarters. He also pointed to a strong order book, multiple large deals, and better performance in international markets.
The company is aiming to improve upon its 4.6 per cent constant currency growth recorded in FY2026. TCS has recently signed three major deals and added four new clients with annual revenue of over $100 million, which is expected to support business in the coming quarters.
TCS leadership has also responded to concerns around the future of the IT services industry, especially with the rise of AI. CEO K Krithivasan said that enterprises will continue to need support from companies like TCS to make full use of AI technologies. Chief Operating Officer Aarthi Subramanian added that there is still a gap between the pace at which AI is evolving and how quickly enterprises are adopting it.
The company is also seeing growth in its AI business. It reported AI-related revenue of over $2.3 billion in the fourth quarter, up from previous quarters. TCS has also signed deals with companies like OpenAI and AMD to work on AI-powered data centre projects. In the March quarter, TCS posted a 12 per cent year-on-year rise in net profit to Rs 13,718 crore, while revenue increased 9.6 per cent to Rs 70,698 crore. Sequentially, both profit and revenue also saw growth. At the same time, the company reported a 2.4 per cent decline in annual revenue in constant currency terms for FY2026, its first such drop since going public.
This comes at a time when the company's HR is in the news for all the wrong reasons. Nida Khan, who was the HR manager at the company and was working at a Nashik BPO facility, has allegedly been taken into custody over allegations that she overlooked and may have indirectly supported repeated incidents of sexual harassment and pressure tactics targeting women employees at the workplace, according to reports.