TCS Raises Variable Pay for Senior Employees, Retains 100% Bonus for Juniors

Following the release of the company’s second-quarter results, Chief Human Resources Officer Sudeep Kunnumal stated that Tata Consultancy Services (TCS) would increase variable compensation for senior personnel while maintaining its 100% quarterly incentives for younger people, according to the Press Trust of India. In addition to yearly pay increases, Kunnumal affirmed that workers in grades C, C1, and C2 will continue to receive their full Quarterly Variable Allowance (QVA).

According to him, the updated policy is to compensate senior executives according to their individual and unit success, with total rewards being more than those of the previous year. In essence, it covers everyone who has worked for the company and is eligible for the quarterly bonus, with the possible exception of recent hires, Kunnumal told PTI. The business has been paying 100% at the junior level and will keep doing so. TCS will pay seniors more, once more depending on their performance as individuals and as a team.

Why TCS Decided to Deploy this Move?

Kunnumal reaffirmed in an internal email quoted by the Economic Times that staff at C2 grade and higher would receive 100% of their QVA, while those at C3A grade and higher would receive variable rewards based on performance indicators. He wrote, “This segment’s overall QVA payout will be higher than it was last year.”

The adjustments are made as TCS, the biggest provider of IT services in India, is under investigation for personnel realignment and restructuring. In response to rumours of widespread layoffs, Kunnumal explained that although the company is restructuring positions as part of its push for artificial intelligence, the number of job losses would be closer to 12,000, or around 2% of its worldwide workforce, rather than the 50,000 to 80,000 estimates that some media sources had stated.

At a period of industry-wide change, TCS’s updated pay structure reflects its intention to strike a balance between stability for its younger employees and more robust performance-linked incentives for senior staff. According to analysts, TCS’s variable pay policies frequently serve as a model for larger developments in remuneration in the Indian IT industry.

TCS Layoffs is it On or a Speculation

TCS wants to lay off between 50,000 and 80,000 workers, according to media reports, although Kunnumal refuted the inflated figures. He explained that although TCS is reorganising and restructuring positions as part of its emphasis on artificial intelligence (AI), the actual number of job losses is significantly smaller—roughly 12,000 positions, or 2% of its worldwide workforce. Kunnumal emphasised that many rumours are not factually correct and that the corporation is not aiming for a specific number of layoffs.