Tata Consultancy Services (TCS) has denied reports that it has slashed bonuses for senior employees, asserting that over 70% of its workforce received 100% of their Quarterly Variable Allowance (QVA) for the January–March 2025 quarter.

In a statement shared with People Matters, the IT giant said, “We have paid out 100% QVA to over 70% of the company. For all other grades, the QVA depends on their unit’s business performance. This is in line with our standard practice across quarters.”

The clarification follows media reports suggesting that senior staff at TCS were awarded only a fraction of their variable pay—some allegedly receiving as little as 20%—in the latest quarter. These reports sparked concern across the IT sector, as the company had already delayed annual salary hikes earlier this year amid cost-control measures.

TCS maintained that its approach to variable pay has remained consistent, with performance at the business unit level determining payouts for grades not covered in the 70% full QVA group. The company did not specify how many employees fall into the latter category, but reaffirmed that this structure is standard across previous quarters.

The QVA structure at TCS is designed to reflect the financial and operational performance of specific units, making it possible for payout levels to vary even among employees at similar grades.

The statement aims to correct the perception that TCS is denying bonuses outright to senior staff. Instead, the company has positioned the payout variations as performance-aligned and part of its routine compensation model.

This comes at a time when the industry is facing heightened scrutiny over employee compensation, especially as companies navigate a complex global macroeconomic environment. Delays in salary increments and tighter bonus structures have become increasingly common across the IT sector.

In April 2025, TCS confirmed a delay in its annual salary hikes, with Chief Human Resources Officer Milind Lakkad citing global economic uncertainty and a need to assess business conditions later in the year. While this move drew criticism internally, the company reiterated its commitment to upskilling and employee development, including continued investment in training for freshers, lateral hires, and internal talent.

Despite tightening its compensation strategy, TCS added 625 employees in the fourth quarter, rebounding from a net reduction of over 5,000 in the previous quarter. As of March 2025, the company’s workforce stood at 607,979.

The firm also promoted more than 110,000 employees over the course of FY25, positioning the move as a show of its ongoing focus on career development.

However, attrition crept up slightly to 13.3% in Q4, compared to 13% in the previous quarter. Lakkad stated that the annualised attrition rate was down by 130 basis points year-over-year, suggesting longer-term stabilisation.

TCS onboarded 42,000 freshers in FY25 and plans to maintain that pace in the coming year, though overall hiring remains measured. CEO K Krithivasan acknowledged some softening in business momentum in Q4 after initial signs of recovery in Q3, particularly with clients scaling down projects from mid-February.

While the company has not reported significant project cancellations, Krithivasan signalled a cautious approach moving forward, balancing talent investments and cost management amid persistent global uncertainty.