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While some employees received only 20-40 per cent of their expected variable pay, others saw no payout at all, according to a report.
The variable pay at TCS depends upon both work-from-office attendance and the performance of individual business units.
Tata Consultancy Services (TCS), India’s largest IT services company, has cut variable pay for many of its senior employees for the July-September 2024 period (Q2 FY25) as the business continues to see an uncertain demand environment, according to a Moneycontrol report citing people privy to the development.
While some employees received only 20-40 per cent of their expected variable pay, others saw no payout at all, contrasting with a 70 per cent payout in the previous quarter, according to the report.
The variable pay at TCS depends upon both work-from-office attendance and the performance of individual business units. The latest development highlights the ongoing challenges in demand and the macroeconomic uncertainties that have impacted the lower single-digit growth seen by Tier-I IT companies in Q2.
In Q2FY25, TCS posted a year-on-year revenue growth of 5.5 per cent in constant currency (CC), amounting to Rs 64,259 crore, with a net profit of Rs 11,909 crore.
Responding to Moneycontrol’s detailed queries, a TCS spokesperson clarified, “For Q2FY25 we have paid out 100% QVA (Quarterly Variable Allowance) to junior grades across the company. For all other grades, the QVA depends on their unit’s business performance. This is in line with our standard practice across quarters.”
In April this year, the company had announced annual salary hikes for its workforce, with top performers receiving double-digit increments. Its Chief HR Officer Milind Lakkad had said salary hikes will be in the range of 4.5-7 per cent based on performance, with high-performers receiving double-digit increases.