Tata Consultancy Services (TCS), the Indian IT services firm, has once again reduced variable pay for its senior employees. This is the third consecutive quarter of cuts. The reduced payouts apply to the January–March 2025 period and reflect the company’s ongoing efforts to control costs amid global economic uncertainty.
Senior staff, who usually earn 15–20 per cent of their total compensation through variable bonuses, received only a small portion of their expected payouts. Some reportedly received as low as 20 per cent of their eligible variable pay. This move has caused concern among employees, especially as many met office attendance targets but still saw reduced bonuses.
In April 2024, TCS introduced a policy linking variable pay to office attendance. According to the framework, employees with less than 60 per cent attendance receive no variable pay. Those attending over 85 per cent of the time are eligible for the full amount. However, even those meeting the attendance criteria reported discrepancies in actual payouts during the last two quarters.
Adding to employee concerns, TCS has delayed its annual salary hikes, which were initially expected in April 2025. The company cited global headwinds and business pressures as reasons for the delay. While compensation has been affected, the firm continues to invest in learning and development for both new and existing employees.
Despite financial caution, TCS added 625 employees in Q4 of FY25, offsetting previous workforce reductions. The total headcount now stands at 6,07,979. The company also promoted 1,10,000 employees across the year, highlighting its focus on internal growth. However, attrition edged up to 13.3 per cent, reflecting some workforce instability.
With a mixed outlook on demand and cost control, TCS is treading carefully. Leadership remains optimistic but vigilant, as client spending patterns keep changing and the broader market remains uncertain.
