Archive · 10 Oct 2026
TCS Withholds Senior Staff Variable Pay Despite Rising AI Revenue
Tata Consultancy Services, or TCS, is changing some employees’ quarterly bonus payments.
Workers in grade C3A and above will get no quarterly variable pay for the September quarter.
The company said its performance was below its own targets.
Junior employees will still receive all of the variable pay they earned.
Employees told Reuters that TCS usually pays some of this bonus.
They said this was the first explicit full withholding for these workers in at least two years.
TCS’s sequential revenue growth was its weakest for a September quarter in three years.
But revenue connected to artificial intelligence grew nearly 20%.
TCS shares rose as much as 6.2% on Friday.
Tata Consultancy Services will pay no quarterly variable allowance for the September quarter to employees in grade C3A and above.
Chief human resource officer Sudeep Kunnumal said the quarter’s performance fell short of internal targets.
Junior-level employees will receive 100% of their eligible variable pay.
Employees told Reuters TCS typically awards 50% to 100% of variable pay and had not explicitly withheld all of it from these workers in at least two years.
TCS reported 0.5% sequential constant-currency revenue growth, while AI-related revenue rose nearly 20%; its shares rose as much as 6.2% on Friday.
- Who
- Tata Consultancy Services employees in grade C3A and above; the memo was issued by chief human resource officer Sudeep Kunnumal.
- What
- TCS withheld quarterly variable allowance from C3A-and-above employees, while junior-level employees will receive 100% of eligible variable pay.
- When
- For the September quarter; the reports were published October 10.
- Where
- Tata Consultancy Services in India.
- Why
- TCS said its performance for the quarter fell short of internal targets.
Company rationale
Employee context
Withholding variable pay
Company rationale
TCS said it made the decision after careful consideration because quarterly performance fell short of its internal targets.
Employee context
Employees told Reuters the company typically awards 50% to 100% of variable pay and said this was the first explicit full withholding for these workers in at least two years.
- Affected employees
- Grade C3A and above, typically staff with 7–10 years of experience through senior-level management
- Senior staff variable pay
- No quarterly variable allowance for the September quarter
- Junior staff variable pay
- 100% of eligible variable pay
- Typical variable pay
- Employees told Reuters TCS usually awards 50% to 100%
- Sequential revenue growth
- 0.5% in constant currency, the weakest sequential September-quarter growth in three years
- AI-related revenue
- Rose nearly 20%; the company reported annualised AI revenue of $3.1 billion, up from $2.6 billion in the preceding quarter
- Share movement
- TCS shares rose as much as 6.2% on Friday
- July–September net profit
- ₹13,884 crore, up 15% from ₹12,075 crore in the year-ago period
