Tata Consultancy Services (TCS) has withheld quarterly variable pay for employees in grade C3A and above after the company fell short of its internal performance targets for the September quarter. According to a Reuters report, junior employees will receive 100% of their quarterly variable pay.
TCS Withholds Quarterly Variable Pay for Senior Employees
TCS, one of India's leading IT services companies, has decided to withhold quarterly variable pay for certain senior employees. According to Reuters, the decision was communicated through an internal memo in which Chief Human Resources Officer Sudeep Kunnumal said the company's performance during the quarter did not meet internal targets.
The report describes the move as the first such action in at least two years, with the company deciding to withhold the entire quarterly variable pay for certain employees.
Decision Applies to Employees in Grade C3A and Above
The decision affects employees in grade C3A and above. According to the report, these levels typically include professionals with seven to 10 years of experience and senior management employees.
Junior employees, meanwhile, will receive 100% of their quarterly variable pay. Employees said the company has generally paid between 50% and 100% of variable pay. The withholding could therefore affect the total earnings of the senior employees covered by the decision.
The report did not specify the total number of employees affected or the extent of the reduction in their earnings. It also did not provide information on whether the company had responded to questions about the decision.
TCS Records Its Weakest September-Quarter Revenue Growth in Three Years
The decision comes after TCS recorded its lowest September-quarter revenue growth in three years. The development points to pressure on demand for traditional IT services.
Revenue from the company's artificial intelligence (AI) business, however, increased by approximately 20%.
On Friday, October 9, TCS shares rose by as much as 6.2% amid reports of growth in its AI segment.
