Tata Consultancy Services (TCS) will roll out wage hikes for 80% of its employees starting September 1—even as it plans to lay off around 12,000 staff this year in a sweeping effort to reshape its workforce and future-proof its operations.

According to a PTI report, the compensation hike was announced in an internal email by Chief Human Resources Officer Milind Lakkad and CHRO Designate K Sudeep on Wednesday. “We are pleased to announce a compensation revision for all eligible associates in grades up to C3A and equivalent,” the email read, thanking employees for their “dedication and hard work.”

While the extent of the hikes remains unclear, a company spokesperson confirmed the revision in the report, saying: “We will be issuing wage hikes to around 80% of our employees effective Sept. 1, 2025.”

The announcement comes amid a broader shake-up. TCS is moving to lay off approximately 2% of its global workforce—around 12,000 employees—primarily in mid and senior roles. The company says the cuts are part of its pivot toward becoming a “future-ready organisation,” involving major investments in AI, market expansion, and new infrastructure.

“As part of this journey, we will also be releasing associates from the organisation whose deployment may not be feasible,” the company said last month.

This dual-track approach—hiking pay for junior employees while trimming senior staff—highlights the shifting priorities within India’s IT sector, which is grappling with global economic headwinds, U.S. trade policy pressures, and accelerating AI disruptions.

India’s top tech firms, including TCS, Infosys, and HCLTech, have posted muted single-digit revenue growth in Q1 FY26, reflecting client uncertainty and delayed deal decisions in global markets.

The layoffs at TCS have sparked industry-wide concern, raising questions about whether the IT sector is entering a structural reset after decades of consistent growth.