TCS Reduces Q2 Variable Pay For Senior Staff
As per reports, employees received only 20-40% of the expected variable pay for the quarter
Tata Consultancy Services (TCS) has reportedly reduced variable pay for many of its senior employees for the July-September 2024 period (Q2 FY25). The cuts impacted even those who adhered to the company’s in-office attendance requirements, a change that has surprised employees and industry observers alike.
Sources indicate that the reduction in variable payouts is largely attributed to weakened business demand and prevailing economic uncertainties. According to reports, employees received only 20-40 per cent of the expected variable pay for the quarter, with some not receiving any payout, marking a stark decline from the previous quarter's 70 per cent payout.
TCS’s variable pay policy considers both an employee’s attendance and the performance of individual business units, highlighting the effect of slow market growth on Tier-I IT firms. The company saw modest growth of 5.5 per cent year-over-year in Q2 FY25, with revenues reaching Rs 64,259 crore and a net profit of Rs 11,909 crore.
As part of its attendance policy introduced in April 2024, TCS requires employees to achieve at least 85 per cent in-office attendance to qualify for full variable pay. Those with 75-85 per cent attendance are eligible for 75 per cent of the payout, while 60-75 per cent attendance leads to 50 per cent. Employees attending less than 60 per cent do not qualify for the bonus, making in-office compliance a critical factor in earnings.
