TCS cuts variable pay for senior staff again: Report
05 May 2025

India's top software exporter, Tata Consultancy Services (TCS), has announced a cut in the Quarterly Variable Allowance (QVA) of its senior employees, according to Moneycontrol.

The move comes as the company delays its wage hike review for the current fiscal year.

This is the third consecutive quarter that TCS has slashed variable pay for senior staff members, who reportedly received only 20-30% of their QVA in FY25's fourth quarter (January-March), with almost 60-80% of the pay being deducted.

Variable pay cuts impact senior employees
Pay reduction

Despite following the company's WFH policies, senior employees have seen huge cuts in their variable pay.

An anonymous employee disclosed, "For senior employees, variable pay forms 15-20% of the CTC (cost to company). They (the company) have been deducting the QVA for over a year now. In the last quarter, I got about 20% of my variable pay out."

This has left staffers worried about their pay packages.

TCS responds to pay reduction claims
Company statement

Responding to these allegations, a TCS spokesperson denied the claims in an email to Moneycontrol.

"The assertions in your query are incorrect," they said.

"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."

HR policy change tied to office attendance
Policy update

Last year, TCS also revised its HR policy, linking work-from-office attendance to employee variable pay.

As per an internal memo, employees with 75-85% in-office attendance will get 75% of their variable pay, while those with 60-75% will only receive half.

The updated policy also mentioned that consistent non-compliance could result in disciplinary actions being taken against employees.

TCS postpones wage hikes amid economic uncertainty
Wage freeze

Along with the pay cut, TCS has also announced a delay in its wage hikes this year. The company typically begins rolling them out from April onward.

Chief HR Officer Milind Lakkad said, "Because of the uncertain environment, we will decide during the year on wage hikes. It can be at any time, depending on business."

The decision comes as the IT services industry navigates through macroeconomic uncertainties and anticipates the impact of tariffs on various industries and geographies.