IT jobs are being remade. Accenture and TCS are the first dominoes to fall

**Rachel Varghese** (0:01)
In mid-May, when the Accenture employees in Pune walked into a meeting with their managers, they may have expected the same old annual appraisal discussion. Instead, they were told that things would be done differently this year. The IT services giant has changed how it awards salary hikes for all its employees across the world, not just in Pune.
Instead of breaking up the full hike across their monthly salaries, Accenture is now splitting it into two parts. Half the hike will be added to the base salary like before. The other half was paid as a lump sum on 30th June this year.
An Accenture employee told my colleague, The Ken reporter, Debanjali Biswas, that if the employees would have been told about the change just two or three months in advance, they could have planned better and decided whether to stay or look for other jobs. The thing is, on paper, this does look like a win, especially since the structure would mean that you get some quick cash in hand after years of frozen hikes. But most employees are still worried about what it means in the long term. Because here's the catch, since only half the race gets added to the base salary, each future race is calculated on a smaller number, and that compounds and decreases the salary growth year after year. Plus, base salary isn't just a number on a payslip, it determines things like gratuity, provident fund contributions, and even loan eligibility. Now, Accenture isn't alone in this kind of restructure. Even TCS recently shifted a part of its quarterly bonus to an annual payout instead. Obviously, making it much costlier for employees to quit mid-year. On top of that, companies are also measuring employee performance based on their in-office attendance and the number of projects they complete. So why is all of this happening right now?
Well, to put it quite simply, IT firms are struggling. For example, Accenture's stock crashed nearly 20% in June after the company missed its earnings targets. It even posted a 2% decline in its new services bookings. The ripple effect has ended up hitting Indian IT companies as well.
Of course, a lot of this is owed to AI tripping away at the old labour supply model that these companies were built on. The pressure to deliver projects faster and cheaper is only increasing, and the top players have lost nearly 9 lakh crore rupees in market value over the past five years.
There's also India's new labour codes, which were rolled out in November 2025 These are also pushing MNCs with headquarters in India to increase their employees' base pay. So restructuring hikes like this ends up helping companies manage both finances and their employees. Which means it's probably only going to be a matter of time before the rest of the industry follows suit. But in all of this, for the IT employees who make up a big chunk of India's roughly 6 million tech workforce, the basic promise of a salaried job is starting to look shaky.
Welcome to Daybreak, a business podcast from The Ken. I'm your host, Rachel Varghese, and every day of the week, my co-host Snigdha Sharma and I will bring you one new story that is worth understanding and worth your time. Today is Monday, the 27th of July.
In the short term, nothing really changes for the Accenture employees. By the end of the year, they will still get their full salary hike. The real impact shows up later, in how future races get calculated. The effect of not adding the entire hike amount to an employee's take-home salary compounds from the second year onwards. Now, in an internal memo, Accenture does say that promotions are going to be safe. The full amount will be added to the base salary. But the new structure still affects their future growth, because base salary is what companies look at when they decide the next promotion or salary slab.
It's also what other companies look at when employees try to switch jobs.
The Accenture employee I quoted earlier explained it like this. It's difficult to convince other companies HR that your real hike was 10% when the papers only show 5%.
Then there's also the case of gratuity and provident fund payouts. Now gratuity is calculated on the last drawn salary and excludes variable pay. So, a smaller base after years of reduced compounding would mean a smaller payout. PF Matho is a little bit more nuanced. Contributions are based on percentages of the base salary, but the mandatory 12% only applies up to 15,000 a month unless employees opt for more. Most IT salaries are well above that level, so PF contributions likely won't change that much.