Tata Consultancy Services (TCS) announced it paid 100% of quarterly variable pay (QVA) to 70% of its employees for the January–March quarter. The statement followed a report citing an employee who claimed the company had deducted part of the payout.
According to Moneycontrol, TCS reduced variable pay for some senior employees. An anonymous employee quoted in the report said he received only 20% of his QVA for Q4 of FY25.
This comes after similar reports last year, where some employees saw a cut in variable pay for not adhering to TCS’s Return-To-Office (RTO) policy, which requires employees to work from the office five days a week.
For senior staff, variable pay typically accounts for 15–20% of total compensation. The Moneycontrol report claimed TCS has been deducting QVA for over a year now.
“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 in response to the report.
Later, a report by The Economic Times quoted an employee saying that many staff members from high-performing units, such as BFSI (Banking, Financial Services, and Insurance), received 100% of their variable pay, while employees in segments or verticals with weaker growth were given lower payouts.
What Is the New Variable Pay Policy?
As per reports, TCS revised its QVA policy starting Q2 FY25 (July–September 2024), linking payouts to office attendance. The policy, effective April 2024, grants full variable pay only to employees with over 85% in-office attendance.
Those with less than 60% attendance receive nothing, while others receive partial payouts. In the October–December quarter, some employees reportedly received only 20–40% of their QVA despite meeting attendance requirements.
Adding to concerns, TCS also delayed annual salary hikes last month, citing global economic uncertainty and tariff challenges.
During the company’s post-earnings press conference in Mumbai, Milind Lakkad, Chief Human Resources Officer, said, “Because of the uncertain environment, we will decide during the year on wage hikes. It can be at any time, depending on business.”
“We will take a call on the timing and the quantum of wage hikes in the coming months,” he added.
TCS added 625 employees in Q4 and 6,433 in FY25, bringing its total headcount to nearly 6.8 lakh. Net profit for Q4 FY25 fell 1.68% YoY to Rs 12,224 crore, while revenue rose 5.3% YoY to Rs 64,479 crore. Demand slowed in key sectors including consumer, healthcare, and manufacturing.