Tata Consultancy Services has reduced quarterly variable pay for its mid- and senior-level employees for the April-June quarter (Q1 FY26), while junior-band staff continued to receive 100% of their payout, according to a Moneycontrol report.
Employees in mid and senior grades received an average of 60-70% of their eligible variable pay for the quarter, down from the up-to-80% range paid in the preceding two quarters. The figure still sits well above the 20-40% payouts that persisted for nearly two years until FY26. One senior employee cited in the reporting said their variable pay fell by around 30-35% compared with the previous quarter, adding they had not received a full payout in more than three years.
The cut did not reach junior employees, who make up a large share of the workforce.
“The reduction has primarily affected mid and senior-level employees, while workers in junior bands have continued to receive 100% of their quarterly bonuses,” the Moneycontrol report stated.
The timing overlaps with TCS’s annual salary revision cycle, and the company has said wage increases for its global workforce weighed on profitability during the quarter. TCS reported an operating margin of 24% in Q1, down 130 basis points sequentially. The company also continues to link variable pay to office attendance: employees with at least 85% attendance qualify for the full payout, with tapering slabs below that and no variable pay for attendance under 60%, in line with its five-day work-from-office policy.
