TCS Says No Delay in Process, Employees to Get 100% Variable Pay For June Quarter

Tata Consultancy Services (TCS) has said that it has not delayed the payment of variable pay to the employees for the March-June quarter of 2022-23 fiscal.

The firm clarified, on Tuesday, that it will be paying 100 per cent variable pay to its employees for the first quarter.

"We have come across completely incorrect reports on our compensation. Variable pay is either paid in month one or two as per the normal process, and there is no delay in this process. 100% Variable pay is being paid for Q1," TCS said in a statement, Moneycontrol reported.

The clarification comes after a few reports claimed that TCS had delayed the rollout of variable pay for many senior employees for the first quarter by a month.

The payout was said to be delayed for employees of C3A, C3B, C4 and equivalent grades. An internal email of the firm states that the amount due to be paid in July will be paid by August end reported Economic Times.

Earlier, TCS had said its compensation and bonus cycles were running as planned. So far, more than 90 per cent of TCS employees have received the variable payout, according to the largest software exporter in India.

Other IT majors, including Infosys and Wipro, have also reduced or delayed the variable pay of their employees.

Recently, a few reports claimed that India's second-largest IT services company Infosys has scaled back the average variable pay for its employees to around 70 per cent for the June quarter. The cut in variable pay came amid a margin squeeze and high employee costs.

The IT major reduced the variable payout for the first quarter of FY23 and apprised its employees about the same. It reported a 3.2 per cent rise in the net profit in the June quarter, which was lower than what was estimated.

Infosys, however, raised its full-year revenue growth outlook to 14-16 per cent citing a robust deal pipeline and strong demand.

Wipro also held back the variable pay of managers to the C-suite level executives. According to reports, the employees within grades from freshers to team leaders will get only 70 per cent of the total variable pay.

Wipro reportedly decided due to pressure on margins, inefficiency in the talent supply chain and new investments in technology.