Tata Consultancy Services (TCS), India’s largest IT services exporter, is facing internal backlash as several employees report a decrease in their monthly take-home pay following the latest appraisal cycle.
While the company officially announced average salary increments of approximately 5% to 8% for the 2025-26 fiscal year, a significant number of staffers have taken to social media and internal forums to claim their revised compensation is actually lower than before.
The “Paper Cut”: Restructuring vs. Reality
The discrepancy appears to stem from a major restructuring of the salary components.
Reports indicate that TCS has modified its Cost to Company (CTC) structure to align with India’s new labor codes.
- Gratuity Removal: Employees noted that gratuity—previously listed in the CTC—is now handled internally, making the “on-paper” salary appear smaller.
- Monthly Reductions: Some staffers in lower performance bands (B and C) alleged their monthly earnings dropped by ₹1,000 to ₹3,000, citing changes in how performance-linked pay and variable components are distributed.
Read also: TCS Hike 2026: New CTC Revision is Sparking Employee Anxiety
Performance Bands and Variable Pay Friction
The discontent is further fueled by a strict “forced distribution” model.
Internal communications leaked in May 2026 revealed new managerial instructions. Managers must place at least 5% of employees in the lowest “Band D” category.
Those in this band often see their variable pay slashed or removed entirely.
Conversely, top performers in the “A+” bracket reported double-digit increases, highlighting a widening gap between the company’s highest and lowest-rated talent.
TCS Responds: “Take-Home Pay is Protected”
Responding to the allegations, a TCS spokesperson clarified that the company has not implemented any “salary cuts.”
The management designed the changes to ensure compliance with new wage regulations.
These adjustments also aim to standardize compensation across its 5.84 lakh global workforce.
TCS maintains that “take-home pay is protected” despite employee concerns.
The company claims any perceived decrease is likely a misunderstanding of the new, more tax-efficient salary matrix.
The IT industry currently grapples with cautious client spending.
The tension at TCS underscores the challenge of balancing regulatory compliance with employee morale in a high-pressure performance culture.
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About the Author
Sahiba Sharma
Contributing Writer