Variable Pay Overview
TCS, India's largest IT firm, shared its Q2 FY26 earnings report, which included updates on employee compensation. After announcing layoffs earlier in the
year, the company decided to provide some financial relief. The Chief Human Resources Officer, Sudeep Kunnumal, informed employees via internal email that all staff up to the C2 grade would receive 100% of their Quarterly Variable Allowance (QVA). Furthermore, the overall quarterly bonus for staff was increased compared to previous quarters. For the C3A grade and above, variable payouts will be adjusted based on individual and business performance, with the overall payout for this group being higher than the previous year. This positive development was announced amidst a backdrop of sector-wide challenges including hiring slowdowns, AI-driven shifts, and geopolitical uncertainties.
Financial Performance Highlights
TCS's financial performance for Q2 FY26 showed encouraging signs. The company's net profit rose by 1.4% to reach Rs 12,075 crore for the quarter ending September 30, 2025, according to a regulatory filing. The revenue for the period amounted to Rs 65,799 crore, which represents a 3.7% sequential increase and 0.8% growth in constant currency terms. In comparison, the company's net profit in the corresponding quarter a year ago was Rs 11,909 crore. Financial analysts, based on a CNBC-TV18 poll, had earlier projected the IT major's profit to be around Rs 12,528.3 crore and revenue to be Rs 65,114 crore. The board of directors declared a second interim dividend of Rs 11 per equity share of Rs 1 each, further reflecting the company's strong financial standing.
Headcount and Payout Details
Alongside financial results, TCS also disclosed information about its workforce. The headcount decreased by over 19,700 in Q2FY26, bringing the total to 5,93,314 employees. The announcement of 100% variable pay for junior staff and higher bonuses for senior employees was seen as a significant move, especially in light of the earlier layoffs. The actual payout for the staff will be affected by the unit's performance, as indicated in the internal email. It's worth noting that in the prior quarter (April–June), TCS had already provided 100% variable pay to over 70% of its employees. This reveals a consistent effort to reward and retain talent, even amidst challenging market conditions and global economic shifts.
