'Paid 100% QVA to 70% Employees...': TCS Rejects Variables Cut Buzz; Know Everything Here

IT major Tata Consultancy Services (TCS) on Monday rejected media reports claiming that it had reduced the variable pay of its senior employees in the March quarter of the financial year 2024-25. Earlier, certain media outlets had reported that senior-level employees at TCS had faced a variable pay cut in Q4FY25.

According to reports, IT firm's senior employees faced a significant variable pay cut for the third consecutive quarter. Rejecting these media claims, TCS asserted that it paid out 100% quarterly variable allowance to over 70% of the company employees.

"We have paid out 100% QVA (Quarterly Variable Allowance) to over 70% of the company. For all other grades, the QVA depends on their unit's business performance. This is in line with our standard practice across quarters," said TCS in response to an email sent by Goodreturns.

What is Quarterly Variable Allowance?

Quarterly Variable Allowance (QVA) is an additional compensation or bonus given to employees by companies. The amount may differ from company to company based on its disbursement criteria. Generally, QVA payout amount is decided based on factors like the employee's performance, or team performance, or company profit. It is normally paid out on a quarterly basis to employees for achieving specific goals or exceeding performance expectations.

The Indian IT major has reportedly announced variable pay cuts in the last two quarters as well. According to a Financial Express report, senior employees at TCS had faced a quarterly variable payout of 30% in the December quarter. Earlier, they had faced a 20-30% variable pay cut in the September quarter of financial year 2024-25.

Over the last few quarters, major IT firms have been attempting to bring their employees back to the office. Many linked the variable pay for employees above a certain grade with the performance of their business unit. Generally, variable pay is linked to the company-wide performance during the period.

Some IT sector firms, including TCS, have now linked the variable pay for employees above a certain grade with the performance of their business unit, instead of a company-wide average percentage.

TCS To Defer Annual Salary Increments

The company had declared its Q4FY25 results in March. During the announcement, it had said that it would defer annual salary increments for employees amid an uncertain business environment.

TCS Includes Office Attendance As Criteria For Variable Pay Eligibility

In 2024, TCS had reportedly revised its HR policy to add office attendance and business unit performance as criteria for variable pay eligibility. Apart from senior executive-level employees, TCS's junior-level employees received a 100% variable payout, some of them received 90-95% based on office attendance variable pay, as reported by Financial Express earlier.

While junior-level employees received full variable pay, there has reportedly been a significant cut in variable pay for senior-level professionals at TCS. One of the reasons for this could be to minimise attrition rate among junior level employees.

TCS Q4FY25 Results

TCS in April reported a mild decline in its consolidated net profit to Rs 12,224 crore during the fourth quarter of financial year 2024-25. Its consolidated revenue increased in single-digit to Rs 64,479 crore in the March quarter as its overall profit surged by 5.76% YoY in FY25.

The IT firm's FY25 performance was affected by challenges in total contract value (TCV) conversion and sustaining growth in emerging markets as the core markets show slow recovery.

TCS growth in Q4 was driven by India business which flourished by 33% YoY, followed by MEA which posted 13.2% YoY growth. Asia Pacific region recorded growth of 6.4% YoY. UK and Continental Europe reported growth of 1.2% and 1.4% year-on-year. De-growth was seen in North America by 1.9%.

The Tata group subsidiary's workforce stood at 607,979 as on March 31st, 2025. Its total workforce consisted of 35.2% women with 152 nationalities. Its attrition rate was at 13.3% for the last twelve months, TCS said in its press release in April.