India’s largest IT company, Tata Consultancy Services (TCS), has confirmed 100% variable allowance for more than 70% of its workforce for the April–June quarter. The company said the decision follows its standard quarterly practice, ensuring timely performance-linked payouts amid broader economic challenges.
“All employees up to C2 grade will receive 100% of the Quarterly Variable Allowance (QVA),” Chief Human Resources Officer Milind Lakkad wrote in an internal email. Employees in the C3 grade and above, typically in more senior roles, will receive variable pay based on the performance of their individual business units.
No Clarity on Annual Wage Hikes Yet
While TCS has maintained consistency in variable payouts, annual wage hikes remain undecided. The company cited a weak macroeconomic environment—marked by global conflicts, delayed decision-making, and reduced discretionary spending by clients—as reasons for the delay. TCS has reported a fall in dollar revenue for three consecutive quarters, adding pressure to hold off on long-term compensation commitments.
Challenges in the Tech Sector
Chief Executive K Krithivasan addressed the broader industry situation, noting a continued slowdown in discretionary tech investments. “With respect to discretionary investments, this trend has continued and intensified to some extent in this quarter,” he said, explaining that uncertain global conditions and disrupted supply chains have slowed client spending decisions.
Discretionary technology investments are a key growth driver for software services firms like TCS, and their decline has impacted revenue and hiring plans across the sector.
Hiring Momentum Continues
Despite these headwinds, TCS added 5,060 employees in the April–June quarter, bringing its total headcount to nearly 613,000. The firm appears to be maintaining cautious optimism, positioning itself to respond quickly when market conditions improve.
Conclusion
TCS’s move to ensure 100% variable pay for a majority of its workforce reflects its commitment to employee performance and stability. However, the uncertain global outlook and sustained revenue decline continue to cloud decisions around wage hikes and future investments, indicating a cautious stance as the company navigates ongoing economic turbulence.
