IT Major Reinforces AI-Ready Workforce Strategy Despite Decline in Overall Headcount

India’s largest IT services company, Tata Consultancy Services, has announced the rollout of annual salary hikes for employees across all grades, effective April 1, reaffirming its commitment to talent retention and future-ready workforce development.

The announcement was confirmed by Sudeep Kunnumal, who stated that the company continues to invest in strengthening its workforce through both lateral hiring and campus recruitment. While the exact percentage of salary increments has not been disclosed, the move signals stability in employee compensation amid evolving industry dynamics.

Focus on AI and Future Skills

TCS emphasized its strategic focus on building an AI-first organization. The company currently has over 270,000 employees trained in AI and machine learning, reflecting a strong push toward digital transformation. This aligns with growing global demand for advanced technology solutions and positions TCS to remain competitive in the rapidly evolving IT services landscape.

The company reiterated that investments in upskilling and reskilling will continue into FY27, ensuring employees are equipped to meet changing client requirements.

Workforce Trends Show Mixed Signals

Despite the positive development on salary hikes, TCS reported a decline in overall headcount on a year-on-year basis. The total workforce stood at 584,519 employees at the end of FY26, compared to 607,979 in FY25.

However, on a quarterly basis, the company added 2,356 employees in Q4 FY26, indicating a gradual stabilization in hiring trends after a period of moderation.

Context: Previous Salary Cycle

In FY25, TCS had delayed salary hikes by several months, implementing them from September 2025. The increments during that cycle ranged between 4.5% and 7%, with top performers receiving higher, double-digit increases.

Industry Outlook

The latest salary revision comes at a time when the IT sector is navigating global macroeconomic uncertainties, cost pressures, and shifting client priorities. While hiring has slowed across the industry, companies like TCS are focusing on high-skill talent, AI capabilities, and operational efficiency to drive long-term growth.

With this move, TCS aims to balance cost management with employee satisfaction, while continuing its transition toward a technology-driven, innovation-led future.