Tata Consultancy Services (TCS) will withhold quarterly variable pay for employees at grade C3A and above for the quarter ended September 2026, after falling short of internal performance targets. Junior employees, however, will receive their full eligible quarterly variable allowance, according to a Reuters report citing an internal company memo.
In the memo, Sudeep Kunnumal, chief human resources officer at TCS, said the decision followed the company’s performance falling short of internal expectations. The affected grades typically include employees with seven to 10 years of experience, as well as those in senior management positions.
Employees at junior levels will receive 100 per cent of their eligible quarterly variable allowance. Employees who spoke to Reuters on condition of anonymity said TCS typically paid between 50 and 100 per cent of variable pay. They added that this was the first time in at least two years that the company had explicitly announced a complete withholding of the payout for the affected group.
The decision comes amid pressure on traditional IT services demand, even as the company expands its artificial intelligence business. TCS reported its weakest sequential revenue growth for a September quarter in three years, according to Reuters. However, its annualised AI revenue rose nearly 20 per cent, with the business crossing $3 billion.
TCS had a workforce of 5,98,056 employees at the end of the quarter.
