TCS Announces 100% Variable Pay For 70% Workforce In Q3

Tata Consultancy Services (TCS) on Thursday said 70 per cent of its workforce will receive 100 per cent variable pay, while the remaining 30 per cent will have their variable pay determined based on business and performance metrics.

"It'll be 100 per cent for 70 per cent of our workforce, and for the remaining 30 per cent, it will be based on business and performance," said Milind Lakkad, Chief HR Officer at TCS.

The trend was similar for Q2 FY24, when the company rolled out full variable pay for 70 per cent of its employee base. 

As of 31 December 2023, TCS maintained an employee count of 6,03,305. The company also achieved a reduction in the attrition rate, which stood at 13.3 per cent, down from 14.9 per cent in the previous quarter.

The company reported higher-than-expected revenue for the quarter ended December 2023, with a sequential growth of 1.5 per cent. However, the bottom line was below expectations, experiencing a 2.5 per cent drop in profit. This dip is attributed to a one-time charge of Rs 958 crore incurred during the quarter for the settlement of a legal claim, impacting the net profit.

TCS secured deals worth USD 8.1 billion in Q3 FY24, albeit lower than the USD 11.2 billion recorded in the September quarter. 

The company reported an Earnings Before Interest and Taxes (EBIT) margin of 25 per cent, up from 24.3 per cent in the previous quarter. 

In anticipation of the earnings announcement on Thursday, TCS shares ended 0.6 per cent higher on the NSE at Rs 3,735.55.