Senior employees at TCS will not receive quarterly bonuses after the company failed to meet performance targets. Chief human resource officer Sudeep Kunnumal said, “This decision was taken after careful consideration as our performance for the quarter fell short of internal targets.” Meanwhile, junior staff got full variable payouts.
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%.
India's $315 billion IT sector is also facing uncertainty after United States President Donald Trump's administration suspended major IT outsourcers including TCS, Infosys, and HCLTech among others from a key green-card program on Thursday, 9 October, widening a crackdown it says targets fraud and protects American jobs.
TCS posts Q2 earnings, net profit ₹13,884 crore
TCS on Friday reported a 15% jump in July-September quarter net profit to ₹13,884 crore and pointed to continued growth momentum going forward, as per a PTI report.
TCS posted a net profit of ₹12,075 crore in the year-ago period and ₹13,349 crore in the preceding June quarter. The company said its revenue from operations rose 11.22% to ₹73,188 crore in the July-September period from ₹65,799 crore in the year-ago period. In the June quarter, its topline stood at ₹72,275 crore.
About 10% of the overall revenue came from the AI segment, where the company upped annualised revenue to $3.1 billion from $2.6 billion in the quarter-ago period, Chief Executive K Krithivasan said in an analyst call. “For the reporting quarter, growth has been broad-based. Looking at the pipeline, deal signing and client conversations, he is confident of the growth momentum to continue,” Krithivasan said.