TCS Cuts Bonus For Senior Employees For 3rd Consecutive Quarter After Salary Hike Delay, Says 'Have Paid 70% Workforce' - Details Here

Tata Consultancy Services (TCS), India's largest IT services firm, has addressed recent reports of reduced variable pay for senior employees, stating that over 70 per cent of its global workforce received the full Quarterly Variable Allowance (QVA) for the January–March 2025 quarter. The company issued a formal clarification following media speculation, explaining that QVA payouts for the remaining employees were determined by the performance of their respective business units, in line with its standard compensation policy across all quarters.

Tata Consultancy Services (TCS) has responded to media reports indicating that senior employees received significantly reduced variable pay for the January–March 2025 quarter. The company clarified that over 70 per cent of its employees were awarded 100 per cent of their Quarterly Variable Allowance (QVA), with variations for the remaining staff based on the performance of their respective business units.

In a statement to People Matters, TCS said, “We have paid out 100% QVA 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.”

Reports had suggested that some senior staff received as little as 20 per cent of their variable pay, raising concerns within the IT sector. TCS maintained that its approach to variable pay has remained consistent, with performance at the business unit level determining payouts for grades not covered in the 70 per cent full QVA group.

The QVA structure at TCS is designed to reflect the financial and operational performance of specific units, making it possible for payout levels to vary even among employees at similar grades.

This clarification comes amid broader industry scrutiny over employee compensation, especially as companies navigate a complex global macroeconomic environment. Delays in salary increments and tighter bonus structures have become increasingly common across the IT sector.

In April 2025, TCS confirmed a delay in its annual salary hikes, with Chief Human Resources Officer Milind Lakkad citing global economic uncertainty and a need to assess business conditions later in the year. Despite tightening its compensation strategy, TCS added 625 employees in the fourth quarter, rebounding from a net reduction of over 5,000 in the previous quarter. As of March 2025, the company’s workforce stood at 607,979.

The firm also promoted more than 110,000 employees over the course of FY25, positioning the move as a show of its ongoing focus on career development. However, attrition crept up slightly to 13.3 per cent in Q4, compared to 13 per cent in the previous quarter. Lakkad stated that the annualised attrition rate was down by 130 basis points year-over-year, suggesting longer-term stabilisation.

TCS onboarded 42,000 freshers in FY25 and plans to maintain that pace in the coming year, though overall hiring remains measured. CEO K Krithivasan acknowledged some softening in business momentum in Q4 after initial signs of recovery in Q3, particularly with clients scaling down projects from mid-February.

While the company has not reported significant project cancellations, Krithivasan signalled a cautious approach moving forward, balancing talent investments and cost management amid persistent global uncertainty.

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