Tata Consultancy Services (TCS), the largest IT company in India, has faced backlash from employees following the announcement of a 5% average salary hike. Contrary to expectations, many employees report that their take-home pay has actually decreased, with some experiencing reductions of up to ₹3,000. This dissatisfaction is particularly pronounced among employees rated in the B and C performance categories, who claim their financial situation has either stagnated or worsened post-appraisal.

A significant factor contributing to this unrest is the alteration in the company's salary structure, where the gratuity component has been separated from the Cost to Company (CTC). While TCS asserts that gratuity benefits remain intact, the lack of visibility in the new structure has led employees to feel their overall compensation has diminished. Additionally, changes to variable pay, which is now reportedly paid quarterly instead of monthly, have further impacted take-home salaries.

While high-performing employees have benefited with double-digit hikes, the discontent among others is palpable, especially as the IT sector grapples with economic pressures and cautious salary policies. TCS has stated that the new salary structure aligns with the new labour code and aims to enhance employees' take-home pay, yet many employees are left questioning the rationale behind their reduced salaries despite receiving appraisals.