TCS rolls out 100% variable pay to junior employees; mid & senior level staff to get paid based on biz performance

Tata Consultancy Services (TCS), India’s largest IT services exporter, has rolled out 100 per cent variable pay for employees up to C2 grade, while employees above the grade would be awarded variable pay as per business performance, for the third quarter of FY 2022-23.

An email sent from the office of the Chief Human Resource Officer of the company, Milind Lakkad, read, “A decision has been taken to pay 100 per cent of the quarterly variable pay (QVA) to all employees up to C2 or equivalent grades covered under this plan.”

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The email further detailed the variable pay of employees who fall in grades above the C2 level. It read, “The individual payout for C3A or equivalent grades and above may vary depending on the business unit performance.”

An employee of the company explained that C3A grade and above at TCS houses mid to senior-level employees. He explained, “C2 grade has employees with a minimum 4 years' experience, so relatively they are not very senior. Above that is a C3A grade. The positions start with Assistant Consultant. C3A is sort of entry into mid-level and above that is mid to senior level positions.”

In Q2 FY 2022-23, the company had released variable pay to 70 per cent of employees, while others had been awarded variable pay as per business unit performance.

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The IT services company announced its quarterly results for Q3 FY2022-23 on Monday. TCS reported an 11 per cent year-on-year (YoY) rise in profit at Rs 10,846 crore for the December ended quarter compared with Rs 9,769 crore in the corresponding quarter last year. 

Moreover, the revenues for the quarter jumped 19.10 per cent YoY to Rs 58,229 crore from Rs 48,885 crore in the same quarter last year. On constant currency terms, revenues were up 13.5 per cent YoY. Operating margin for the quarter stood at 24.5 per cent, down 0.5 per cent YoY.

For the first time in 10 quarters, the companies headcount was reduced as compared to the previous quarter. The headcount of TCS at the end of September quarter was 6,16,171 and at the end of December quarter FY23 was 6,13,974. The reduction in headcount is 2,197. 

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