TCS announces 100% variable pay for 70% of its employees for third quarter

TCS announced 100 per cent variable pay for its grade C2 employees, and the remaining 30 per cent or senior employees will get variable pay in line with their business performance

India’s largest IT service provider by revenue, Tata Consultancy Services (TCS), has rolled out 100 per cent variable pay for 70 per cent of its employees for the third quarter that ended on December 31, the Economic Times reported.

 

In emails sent to its employees, the TCS announced 100 per cent variable pay for its grade C2 employees, and the remaining 30 per cent of senior employees will get variable pay in line with their business performance.

 

The move comes a day after the results for the third quarter were announced.

 

“A decision has been taken to pay 100% of the quarterly variable pay (QVA) to all employees up to C2 or equivalent grades covered under this plan. The individual payout for C3A or equivalent grades and above may vary depending on the business unit performance,” the email from chief human resource officer Milind Lakkad showed, the ET report said.

 

Those employed as assistant consultants, associate consultants, and consultant levels fall under the C3 designations.

 

The company had awarded 100 per cent variable pay for the second quarter of FY23 as well.

 

The TCS chief financial officer Samir Seksaria, during the October-December period’s earnings briefing, had said the company expects to close the financial year at a 25 per cent operating margin (50 basis points more than Q3).

 

Seksaria had remarked that the elevated expectations of salaries and the backfilling retention expenses having come down is definitely something that is helping (margins).

 

TCS, in the third quarter, reported that 2,197 employees left on a sequential basis as the IT sector faced macroeconomic challenges.