Tata Consultancy Services (TCS), India’s largest IT services firm, has distributed 100% quarterly variable compensation to 70% of its workforce. The remaining staff received variable payments at reduced levels, based on their business units’ performance outcomes.
“We have paid out 100% QVA (Quarterly Variable Allowance) to over 70% of 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,” TCS said officially.
“Many employees from business units with good performance such as BFSI (banking, financial services and insurance) have been granted 100% of the variable pay while those segments or verticals which have reported poor growth performance have given their employees lower payouts,” an employee told ET.
The company leadership discussed postponing the yearly salary increase during April, considering the uncertain economic climate. “We will decide within the year when to make that happen,” stated Milind Lakkad, chief HR officer, during this year’s quarterly results announcement.
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The organisational hierarchy at the Tata subsidiary begins with Y grade for trainees, followed by Systems Engineer positions at C1, progressing through C2, C3 – A&B, C4, C5, and culminating with CXOs.
Staff members holding positions in C3B and higher grades are typically classified as senior personnel.
TCS, with a workforce of approximately 6.8 lakh, recruited 625 employees from January to March, whilst adding 6,433 personnel throughout the fiscal year beginning April 2024.
The reduced QVA corresponds to the organisation’s and industry’s performance, particularly affected in the first quarter due to tariff implications that diminished anticipated business requirements.
During the quarter ending March, the IT leader delivered results below expectations, with net profit declining 1.68% year-on-year (YoY) and 1.26% sequentially to Rs 12,224 crore. Operational revenue increased by 5.3% YoY and 0.8% quarter-on-quarter to Rs 64,479 crore.
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Business demand experienced a significant decrease across primary sectors including consumer, life sciences & healthcare, manufacturing, communications and media.
In the previous year, certain staff members experienced variable pay reductions for not complying with the Return-To-Office (RTO) directive requiring five days of office attendance weekly. TCS established a connection between QVA and minimum 85% office attendance for full quarterly variable pay eligibility. The organisation indicated that policy non-compliance could result in disciplinary proceedings.
