TCS to pay 100% variable pay component to employees for June

24 Aug 2022 , 08:04 AM

The country’s largest IT company, Tata Consultancy Services (TCS), announced on Tuesday that it will pay out 100% variable pay to its 600,000+ employees, contrary to allegations that it had postponed the June variable compensation payout by a month for some employees.

The choice was made at a time when Infosys and Wipro, two of its smaller competitors, halted or suspended the deployment of variable compensation for employees due to margin pressure.

In response to pressure on the operating margin at the Bengaluru-based company, Infosys distributed an average of 70% variable pay to employees for the June quarter. The IT company stated in an internal message that the squeeze had an impact on the payment of the quarterly performance bonus.

News reports claimed that the delay was “administrative” in nature and unrelated to the margin pressure, given the enormous quantity of personnel being covered.

All Indian IT giants reported substantial margin erosion during the June quarter results despite a robust demand environment due to hefty employee expenditures. Analysts claim that some businesses are exercising caution by limiting performance compensation in order to save money.