TCS withholds quarterly variable pay of senior employees after missing internal targets

Tata Consultancy Services (TCS), the country's largest IT company, has withheld the quarterly bonus of its senior employees. The company failed to meet its performance targets, which is why the decision was taken. Layoffs have been under way across the world and in the IT sector in particular, and the decision has now created an atmosphere of fear among employees.

An internal memo says that, for the first time in at least two years, the entire variable pay of some employees has been withheld. Chief Human Resources Officer Sudeep Kunnumal wrote in the memo that the company's performance this quarter fell short of internal targets, and that the decision was therefore taken after careful thought.

According to Kunnumal's memo, the quarterly variable allowance, known as QVA, of employees at "C3A grade and above" for this quarter will be withheld. Employees at C3A grade and above in the company usually have 7 to 10 years of experience, or hold senior-level management positions. The memo also says junior-level employees will receive 100% of what is due to them.

Employees said the tech company usually pays 50 to 100% variable pay. They said this is the first time in at least two years that the company has clearly said no bonus will be paid. TCS did not respond to questions.

Meanwhile, TCS's revenue growth in the September quarter was the weakest September-quarter growth in three years, reflecting continued pressure on demand for traditional IT services. On the other hand, revenue from artificial intelligence (AI) grew by about 20%. On Friday, October 9, investors welcomed this rise in AI revenue and the share climbed 6.2%.