Indias TCS senior staff will miss out on variable pay for September quarter, memo shows

By Sai Ishwarbharath B

Oct 10, BENGALURU - Senior staff at India's Tata Consultancy Services will miss out on quarterly bonuses after the company failed to meet performance targets, according to an internal memo seen by Reuters, the first time in at least two years all variable pay was withheld for some workers.

"For associates C3A grade and above, there will be no QVA (quarterly variable allowance) this quarter. This decision was taken after careful consideration as our performance for the quarter fell short of internal targets," said Sudeep Kunnumal, chief human resource officer in the memo.

Quick answers to key questions

•5 QUESTIONS

1

Why did TCS withhold quarterly variable pay from senior employees?⌵

TCS said its performance for the September quarter fell short of internal targets. The decision was communicated in an internal memo from the company’s chief human resource officer.

2

Which TCS employees will not receive variable pay for the September quarter?⌵

Employees in grade C3A and above will receive no quarterly variable allowance (QVA) for the quarter. These grades typically include staff with 7–10 years of experience through senior-level management.

3

Will junior TCS employees receive their September-quarter variable pay?⌵

Yes. The memo said junior-level employees will receive 100% of their eligible variable pay.

4

Is this the first time TCS has withheld all quarterly variable pay from senior staff?⌵

Employees told Reuters it was the first time in at least two years that TCS had explicitly said no bonuses would be awarded to these workers. They said the company typically awards 50% to 100% of variable pay.

5

How did TCS perform in the September quarter before withholding senior staff bonuses?⌵

TCS reported its weakest sequential September-quarter revenue growth in three years, with constant-currency revenue growth of 0.5%. The company said its overall quarterly performance fell short of internal targets.

Associates in C3A and above grades are employees with typically 7-10 years of experience up to senior-level management. The junior-level employees will get 100% of the eligible pay, the memo added.

Mails sent to TCS did not elicit a response. Employees, speaking on the condition of anonymity, said typically the company awards 50-100% of variable pay and it is the first time in at least two years that the company has explicitly said no bonuses shall be awarded.

This comes as the country's largest IT firm reported its weakest September-quarter sequential revenue growth ‌in three years, signaling continued pressure on traditional IT services demand even as AI-related revenue jumped nearly 20%. The uptick in AI revenue, however, was cheered by investors on Friday as the stock rose as much as 6.2%.

India's $315 billion IT sector is also facing uncertainty stemming from the Trump administration as it suspended major IT outsourcers including TCS, Infosys, HCLTech from a key green-card program on Thursday, widening a crackdown it says targets fraud and protects American ‌jobs.

(Reporting by Sai Ishwarbharath B in Bengaluru; Editing by Christian Plumb)

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