TCS Cuts Senior Employees’ Variable Pay for Second Consecutive Quarter
TCS Cuts Senior Employees' Variable Pay for Second Consecutive Quarter
In the July-September quarter prior, certain employees received only 20-40 percent of their quarterly variable allowances (QVA), with some not receiving any at all.
India’s leading software exporter, Tata Consultancy Services (TCS), has reduced the quarterly variable pay for senior staff for the second straight quarter, even though they have been following the company’s work-from-office policies, sources informed Moneycontrol.
In the July-September quarter prior, certain employees received only 20-40 percent of their quarterly variable allowances (QVA), with some not receiving any at all. This was significantly lower than the nearly 70 percent QVA distributed in Q1FY25.
A company insider revealed that in the third quarter, nearly all of the QVA was distributed to 70 percent of the workforce, primarily comprising junior staff. Meanwhile, the remaining 30 percent of senior employees received their payouts according to the performance of their respective business units.
“I was supposed to get Rs 50,000- 55,000 in QVA, but ended up getting half last quarter and this quarter it was even less, at a fourth,” said an employee on condition of anonymity.
Last year, TCS established a connection between office attendance and the variable pay of its employees. The HR policy was revised to require a minimum of 85 percent in-office attendance for employees to qualify for their full quarterly variable pay. Failure to meet this standard consistently may result in disciplinary measures.
Employees who maintain an attendance rate of 75-85 percent will receive 75 percent of their variable pay, while those with 60-75 percent attendance will only be eligible for 50 percent. Employees with attendance below 60 percent will not qualify for the quarterly bonus, as outlined in an internal memo.
Wage Increases Postponed
In the competitive landscape, TCS has outperformed its rivals, such as Infosys and HCLTech, by implementing salary increases more promptly. TCS initiated its wage hike cycle in April 2024, during the first quarter, while Infosys, HCLTech, and LTIMindtree postponed theirs until the third quarter and later.
During the third quarter, TCS also advanced over 25,000 employees, resulting in a total of nearly 20 percent promotions for the fiscal year, which amounts to more than 110,000 employees within its workforce.
The company’s workforce saw a reduction of 5,370 employees in the third quarter, indicating a shift after two quarters of growth in headcount.
Despite this, TCS is experiencing sustained demand for the upcoming quarters, having reported a robust deal pipeline exceeding $10.2 billion during a typically slow quarter.
