TCS Cuts Variable Pay for Senior Employees

Tata Consultancy Services (TCS) has reportedly reduced variable pay for mid- and senior-level employees by around 30–35% compared with the previous quarter. While the payout is still better than the 20–40% variable pay received by these employee groups during an earlier period of nearly two years, several employees have expressed disappointment over the latest reduction. Some senior employees say they have not received the full 100% variable pay for nearly three years. In contrast, junior-band employees, who make up a large part of TCS’s workforce, have reportedly continued to receive their full 100% quarterly bonus.

The company has also linked variable pay to office attendance. TCS has been strictly implementing its five-day work-from-office policy, with employees required to maintain at least 85% attendance to qualify for the full variable pay. Those with 75–85% attendance reportedly receive 75% of the variable component, while employees with 60–75% attendance receive 50%; attendance below 60% can result in the variable pay being completely withheld. At the same time, TCS has begun its annual salary increments, which have put pressure on operating margins. CFO Samir Seksaria said the June-quarter operating margin fell to 24%, with annual increments contributing to a 170-basis-point impact. The company has indicated that such investments are aimed at strengthening AI-led capabilities for the future. Infosys has also reportedly reduced variable pay to 70% for the same quarter.