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Tata Consultancy Services reduced quarterly variable pay for mid- and senior-level employees to an average 60-70 percent in the April-June quarter, down from 60-80 percent in the previous two quarters. Junior employees continued receiving their full payout. The reduction comes as TCS faces margin pressure following annual salary hikes and increased investments in AI.

Tata Consultancy Services has reduced quarterly variable pay for employees in mid and senior bands for the April-June quarter, even as junior staff continued to receive their full payout.

Employees in mid and senior grades received an average of 60-70 percent of their eligible variable pay for the quarter, lower than the 60-80 percent range paid out in the preceding two quarters. The latest figure, however, remains well above the 20-40 percent payouts that persisted for nearly two years before improving in FY26.

Payout decline follows recent improvement

The dip marks a pullback after TCS had raised variable payouts earlier in the year. One senior employee told Moneycontrol that their variable pay fell by 30-35 percent compared with the previous quarter, adding that they had not received a full payout in more than three years.