Tata Consultancy Services (TCS) has reduced quarterly variable pay for senior employees for the second consecutive quarter, despite adherence to work-from-office norms. This move comes after a similar cut in the July-September quarter.
In Q2, some employees received only 20-40 per cent of their quarterly variable allowances (QVA), while others got nothing. In contrast, Q1FY25 saw nearly 70 per cent payouts. Employees reported receiving significantly lower amounts than expected, with some getting as little as a fourth of their usual QVA.
During Q3, 70 per cent of TCS employees—mainly juniors—received full QVA. The payouts of the remaining 30 per cent, primarily senior staff, were linked to the performance of their respective business units.
Last year, TCS tied work-from-office attendance to variable pay. Employees needed at least 85 per cent attendance to receive full QVA. Those with 75-85 per cent attendance got 75 per cent of their variable pay, while those with 60-70 per cent received only 50 per cent. Employees attending less than 60 per cent of the time were not eligible for bonuses.
TCS has maintained timely salary increments compared to Infosys and HCLTech, that delayed their wage hikes until Q3 or later. Tata Consultancy Services initiated its hikes in April 2024.
The company promoted over 25,000 employees in Q3, bringing the total promotions for the fiscal year to more than 1,10,000, or nearly 20 per cent of its workforce. Despite this, TCS’s headcount dropped by 5,370 in Q3, reversing two quarters of employee growth.
The firm reported a strong deal pipeline worth over $10.2 billion, reinforcing demand for the upcoming quarters despite a weak period.
