TCS Offers Full Q1 Variable Pay to Majority of Employees, Keeps Hike Plans on Hold

Tata Consultancy Services (TCS), India’s largest IT services provider, has disbursed 100% of the quarterly variable allowance (QVA) to over 70% of its workforce for the April–June quarter, according to an internal communication from the company’s HR head, Milind Lakkad. The remaining employees—primarily those in senior roles—will see variable pay linked to the performance of their specific business units.

In an email shared with employees last week, Lakkad stated that all staff up to the C2 grade (or equivalent levels) will receive the full variable component for the first quarter. Employees in the higher C3 grade and above, which includes senior and leadership positions, will have their payouts adjusted based on business unit performance.

TCS’s employee hierarchy begins with trainees at the ‘Y’ level, moving up through C1 (systems engineer), then C2, C3 (split into A & B bands), followed by C4, C5, and CXO levels.

Responding to media queries, a TCS spokesperson confirmed the variable payouts, emphasizing that the process aligns with the company’s standard quarterly compensation framework.

However, the company has not yet announced its annual salary increments, citing a challenging global business climate. TCS has seen revenue decline in dollar terms for three consecutive quarters, a trend driven by sluggish discretionary tech spending and broader economic uncertainties.

During Q1 FY25, the company added 5,060 employees, bringing its total workforce to approximately 613,000.

Reflecting on the quarterly performance, CEO K Krithivasan noted a continued delay in client decision-making and project commencements. “Discretionary investments remain muted and even worsened slightly this quarter due to ongoing global conflicts, macroeconomic concerns, and supply chain disruptions,” he said. Krithivasan added that a rebound in client spending is expected once there’s greater economic clarity.

Source: Economic Times