India’s largest IT services firm, Tata Consultancy Services (TCS), has announced its quarterly variable allowance (QVA) for employees, pledging to pay
100% of it to junior staff, while the payout for mid and senior employees is expected to be higher than last year, depending on business performance.
Salary Hikes Rolled Out for Junior Employees
According to a report in Economic Times, TCS Chief Human Resource Officer Sudeep Kunnumal told employees via email, “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.”
According to the email, junior employees in grades C, C1, and C2 usually receive both annual hikes and full variable pay, as they fall into lower salary brackets. Employees at C3A and above are treated differently regarding hikes and variable payouts, an employee said on condition of anonymity.
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QVA Payout Details
The email further stated, “We have announced our results for Q2 of FY26 and we have delivered steady growth. Thank you for your contribution. All employees up to C2 grade (or equivalent) covered under the quarterly variable allowance (QVA) plan will receive 100% of the QVA. The individual payout for C3A grade and above (or equivalent grades) may vary, depending on business performance. I am glad to inform that the overall QVA payout for this segment will be higher than the previous year. The actual payout will depend on the unit performance.”
Q2FY26 Financial Performance
On Thursday, TCS reported a 3.8% quarter-on-quarter (QoQ) drop in net profit, from Rs 12,760 crore in Q1FY26 to Rs 12,075 crore in Q2FY26. Revenue, however, rose 3.7% QoQ to Rs 65,799 crore, with constant currency revenue growth at 0.8%.
The company also reduced its headcount by nearly 20,000 employees in the September quarter, the report added. Meanwhile, the number of employees skilled in advanced AI and ML technologies doubled to 1,59,000 from a year ago, reflecting TCS’s push into emerging technology areas.
