Tata Consultancy Services (TCS) has reduced the variable compensation paid to employees in its mid- and senior-level positions for the April-June quarter, reported Moneycontrol, citing people familiar with the development.
The IT major disbursed an average of 60-70% of the eligible variable pay during the first quarter, with the reduction coming as the company faces pressure on operating margins while continuing investments in artificial intelligence (AI), according to the report.
Junior employees, who make up the largest share of the TCS workforce, continued to get their quarterly bonus in full.
The variable compensation distributed by in the first quarter was below the levels seen in the preceding two quarters, when payouts for mid- and senior-level employees reached as high as 80%, as per sources quoted in the report.
Despite the decline from the previous quarter, the Q1 payout was higher than the year-ago level. For nearly two years until Q1FY26, mid- and senior-level employees received 20-40% variable pay, the report said.
A senior employee told Moneycontrol that their variable compensation had been reduced by around 30-35% in the latest quarter compared with the previous quarter, claiming it had been more than three years since they had received the full 100% variable payout.
LiveMint contacted TCS for a comment, but the company did not respond to the request.
Top 5 firms lose ₹1 lakh crore in market value, TCS takes biggest hit
Meanwhile, the combined market capitalisation of five companies among the top 10 most-valued firms declined by ₹1 lakh crore last week, with IT major TCS witnessing the steepest fall, as domestic stock markets remained under pressure, as per a PTI report on 16 August.
The fell 489.92 points, or 0.62%, over the week, while the NSE Nifty dropped 204.65 points, or 0.83%.
“Markets ended the week lower as elevated crude oil prices, renewed geopolitical uncertainty and mixed global cues weighed on investor sentiment,” Ajit Mishra, SVP, Research, Religare Broking Ltd, said.
Reliance Industries, HDFC Bank, ICICI Bank, State Bank of India and TCS were among the top-10 firms whose market values declined. In contrast, Bharti Airtel, Bajaj Finance, Larsen & Toubro, Life Insurance Corporation of India (LIC) and Hindustan Unilever gained in valuation. Together, the five gainers added ₹55,149.45 crore to their market capitalisation.
TCS set to build team of forward-deployed engineers
TCS is planning to create a workforce of between 5,900 and 8,900 forward-deployed engineers (FDEs), according to CEO .
“We would be … ensuring that we have as many as 1 per cent to 1.5 per cent of our associates who could be what you would call FDEs,” Krithivasan told Reuters recently.
The proposed FDE workforce would represent around 1-1.5% of TCS’s total employee base. As of 30 June 2026, the IT major had 593,798 employees globally.