IT giant Tata Consultancy Services (TCS) has delayed performance bonus or variable compensation payout by a month for some employees for the quarter ending June. TCS is India’s largest IT services company by revenue. The company has delayed the variable payout for employees at the assistant consultant, associate consultant and consultant level by a month. These employees come under C3A, C3B, C4 and equivalent grades. The variable pay that was due to be paid in July will be paid by August-end now, as per an internal email. The email was reportedly sent in July. Here are excerpts from the email as seen by Economic Times (ET).
“The performance bonus for Q1 FY23 is yet to be finalised for C3A, C3B, C4 and equivalent grades. This will be paid along with August 2022 payroll to eligible associates,” says the email. The email does not specify the reason for the delay or the quantum of the bonus which will be given out. The experience range of employees in the impacted bands reportedly ranges from 7 to 15 years. The annual variable component typically accounts for 10% of the pay package. Roughly 10-15% of the company’s employee base fall under this category.
“All our compensation and bonus cycles are as per plan,” a TCS statement said in response to ET’s queries. Sources also told ET that this was an “administrative issue”. They claimed that the delay is not due to cost concerns and that it should not be linked to Wipro withholding variable pay of mid- and senior-level employees.
TCS had a total headcount of over 6,06,300 employees at the end of June.
Wipro holds back variable pay for June quarter
As per an internal communication, the country’s fourth largest IT services provider Wipro is holding back the variable payouts of mid-to-senior level employees for the June quarter. As per the company’s structure, these employees belong to C bands and above (managers to C-suite level). The company communicated the decision to employees in an internal note sent a few days ago. Wipro cited lower margins as the reason for the decision.