After making tremors in the IT sector and facing sharp criticism for announcing a 2% cut in its global workforce last year, Tata Consultancy Services (TCS) is back in the news, but for favourable reasons this time.
The Tata Group company has raised quarterly variable payout for mid- and senior-level employees to up to 80 percent for the third quarter, according to a report by Moneycontrol.
The development is significant as the variable payouts were slashed to 20–50 percent for mid- and senior-level employees during the last two years.
According to the media report, the move aligns with the company’s ongoing workforce rejig as AI (artificial intelligence) takes centre stage in its strategy going forward.
A majority of mid-level employees received 80% of their variable payout, aligning with what was mentioned in their offer letters, said one of the sources cited in the media report.
“For senior-level employees, it (payout) is still between 40–80 percent,” the source said.
TCS is India’s largest services exporter, and any development in the company influences sentiment across India’s information technology sector.
With this decision, the company has now joined the cohort of peers like Infosys and Cognizant. Infosys has raised its average quarterly variable allowance to 85 percent in the third quarter of the current financial year.
New Jersey-headquartered Cognizant will also give a 100 percent bonus payout for 2025, a decision taken after the company achieved crucial growth targets ahead of the timeline.
Meanwhile, TCS appears confident about near-term demand amid the rising significance of AI technology. The company reported annualised AI revenue of $1.8 billion in the third quarter of FY26, which was 17% higher on a quarter-on-quarter basis. The company has worked on over 5,500 AI projects as well.
As of the December quarter, it had a total contract value of $9.3 billion. However, the overall outlook of the IT industry has been uncertain amid rising geopolitical challenges and AI disruption.
