Good News for TCS employees! IT major to pay ‘higher’ variable pay, junior employees get 100% — Here's what we know

India's largest IT company, Tata Consultancy Services (TCS), Chief HR Officer Sudeep Kunnumal, after the Q2 results, said that the firm will pay a higher variable pay amount to its ‘senior’ employees based on the individual's performance.

Kunnumal also reassured people that the company now pays a higher quarterly bonus or variable pay component compared to what they used to pay in the previous quarters.

The Chief HR of TCS also stated that the IT major has been paying its ‘junior’ level employees a variable pay component of 100%, which they plan to continue in the upcoming quarters.

“Basically, it covers all the people who have been with our organisation, who are entitled for the quarterly bonus, except maybe for new joinees... but it covers practically every one... normally, at the junior level we have been paying 100 per cent, which is what will continue and for seniors, we will pay a higher amount, which is again based on the individual and unit performance,” said TCS CHRO Sudeep Kunnumal, reported the news agency PTI.

Letter to the employees

According to an ET report, the junior-level employees at TCS who are working at C, C1, and C2 roles get annual salary hikes as well as full variable pay, as they fall under a lower salary bracket.

However, the employees who are working at the C3A level are allegedly treated differently, according to a TCS employee cited in the news portal's report.

“All employees up to C2 grade (or equivalent) covered under the quarterly variable allowance (QVA) plan will receive 100% of the QVA,” Kunnumal said in an email to the employees, cited the news portal. “The individual payout for C3A grade and above (or equivalent grades) may vary, depending on business performance. I am glad to inform that the overall QVA payout for this segment will be higher than the previous year. The actual payout will depend on the unit performance,” the mail said.

TCS Layoffs

Mint reported earlier that TCS plans to cut nearly 12,000 jobs, or almost 2% of its global workforce, in the financial year 2025-26, as the IT major plans to focus on restructuring plans amid the push for artificial intelligence (AI).

However, there were many media reports which suggested that the IT major is likely to lay off 50,000-80,000 people. But the CHRO on Thursday clarified that ‘a lot of these numbers are not factual, are extremely exaggerated.’

Kunnumal also said that the company is not chasing a number for its company-wide restructuring activity.