TCS employees say salary reduced by Rs 3,000 after appraisal despite 5 percent hike announcement

Employees at TCS are questioning the company’s latest appraisal cycle after several staffers claimed their monthly salaries have been reduced despite TCS announcing an average hike of around 5 per cent. A fresh report from Money Control claims that the company rolled out salary revisions on May 18, but there seems to be no celebration among employees, as the appraisal season has sparked confusion and frustration, especially among those in lower performance bands.

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Several workers alleged that their revised compensation either barely increased or actually fell after restructuring changes linked to India’s new labour codes. One employee reportedly claimed their salary decreased by Rs 3,000 per month even after receiving an appraisal letter, while others said their annual compensation had reduced by Rs 1,000 to Rs 10,000 on paper.

Much of the confusion appears to be around changes in the company’s salary structure. According to the report, TCS has removed gratuity from the displayed Cost to Company (CTC) structure this year, even though gratuity payments will continue internally. A senior source told Moneycontrol that both gross salary and take-home pay were “protected” and argued that employees were comparing the new structure with older salary letters where gratuity was included in overall CTC.

But many employees are still unhappy. Some said the revised compensation now looks smaller on paper, something they fear could hurt salary negotiations while switching jobs. Workers also raised concerns over shrinking variable pay. Some alleged monthly variable payouts were reduced or shifted to quarterly and annual cycles. Others claimed bonuses and performance pay were increasingly linked to work-from-office compliance.

Performance ratings decide hike size at TCS

Employees with stronger performance ratings appeared to benefit the most from this year’s appraisal cycle. Staffers in the highest-rated A+ bracket said they saw salary increases going into double digits, while many employees in the A category reported moderate hikes. However, employees placed in lower performance groups said the increments were far less rewarding. Several workers in the B and C categories claimed the hike barely made a difference to their salaries, and some even alleged their revised pay structure left them with lower earnings than before.

The controversy comes at a time when India’s IT industry is dealing with weak client spending, delayed projects, and pressure on profit margins. Most large IT firms have remained cautious about salary hikes this year. Rivals such as Infosys, HCLTech, and Tech Mahindra are yet to fully roll out increments for employees.

TCS currently employs more than 5.84 lakh people. Responding to the concerns, the company told India Today Tech that the revised salary structure was aimed at complying with "new labour codes," standardising compensation structures, and protecting employee take-home pay while enabling flexibility for tax efficiency.

"In line with the announcement made during our Q4 earnings, we have rolled out annual increments to eligible employees. Additionally, we have completed the restructuring of compensation for all our India-based employees to align with the new labour codes. The revised salary structure that the employees have received are guided by three key principles that include, compliance with the new labour codes, standardisation of wage structures across our India workforce, and protection of employees’ take-home salary, while allowing flexibility for tax efficiency. TCS has consistently maintained a track record of awarding annual increments to its associate’s year-on-year, reinforcing its commitment to employee growth and long-term value creation," a TCS spokesperson told India Today Tech.

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