TCS senior employees miss quarterly variable pay as AI revenue rises nearly 20%; juniors get full payouts

Tata Consultancy Services will withhold quarterly variable pay from senior employees at C3A grade and above after missing internal performance targets. Junior staff will receive their full eligible pay, as per a report. 

Senior employees at Tata Consultancy Services (TCS) will not receive quarterly bonuses after the I-T giant failed to meet performance targets, Reuters reported citing an internal memo. This is the first time in at least two years all variable pay was withheld for some workers, it added.

"This decision was taken after careful consideration as our performance for the quarter fell short of internal targets,” said chief human resource officer Sudeep Kunnumal in the memo.

The report added that TCS did not respond to queries.

No bonus for senior TCS employees: What we know

• According to Kunnumal's memo, quarterly variable allowance (QVA) for this quarter, will be held back “for associates C3A grade and above”.
• As per the report, associates in C3A and above grades at the country's largest IT services company are usually employees with 7-10 years of experience up to senior-level management.
• The junior-level employees will get 100% of the eligible pay, the memo added.

Weakest September-quarter for TCS

Employees told Reuters the tech company usually gives 50-100% of variable pay. It cited them say that this is the first time in at least two years that the company has explicitly said no bonuses shall be awarded.

Notably, TCS reported its weakest September-quarter sequential revenue growth ‌in three years, signaling continued pressure on traditional IT services demand even as artificial intelligence (AI)-related revenue jumped nearly 20%, the report said.

The uptick in AI revenue, however, was cheered by investors on Friday, 9 October, as the stock rose as much as 6.2%.