TCS Announces Quarterly Variable Allowance for Employees
India’s largest IT services firm, Tata Consultancy Services (TCS), has announced a quarterly variable allowance (QVA) for its employees, committing to disburse 100% of this allowance to junior employees.
Chief Human Resource Officer (CHRO) Sudeep Kunnumal communicated the news to employees, stating that the QVA for mid and senior employees is expected to be higher compared to the previous year. “I am pleased to share with you that the annual salary hike was rolled out for associates in grades up to C3A and equivalent, effective Sep 25, with high performers receiving double-digit increments,” Kunnumal noted in an email.
Junior employees at grades C, C1, and C2 typically receive annual hikes along with full variable pay due to their positioning within lower salary brackets. However, employees at level C3A and above follow different protocols regarding hikes and variable pay, as per an anonymous employee source.
Further details in the email indicated, “We have announced our results for Q2 of FY26, and we have delivered steady growth. Thank you for your contribution. All employees up to the C2 grade (or equivalent) covered under the quarterly variable allowance (QVA) plan will receive 100% of the QVA.” Kunnumal added that individual payouts for C3A grade and above may vary based on business performance. He expressed satisfaction that the overall QVA payout for this segment would exceed that of the previous year, with actual payouts contingent upon unit performance.
On Thursday, TCS reported a 3.8% quarter-on-quarter (QoQ) decline in net profit, amounting to Rs 12,075 crore in Q2FY26, down from Rs 12,760 crore in the prior quarter. However, the company’s revenue experienced a 3.7% QoQ increase to Rs 65,799 crore, with constant currency revenue growth at 0.8%.
In related news, TCS has reduced its workforce by nearly 20,000 employees during the September quarter. On a positive note, the number of employees equipped with high-order AI/ML skills has doubled to 159,000 in the same period compared to a year ago.
