Senior employees at Tata Consultancy Services (TCS) will not receive their quarterly variable allowance for the September 2026 quarter after the company fell short of internal performance targets, according to an internal memo from Chief Human Resources Officer (CHRO) Sudeep Kunnumal.
The withholding applies to associates in grade C3A and above, a band that typically spans employees with seven to 10 years of experience through to senior-level management. Junior employees across the IT services major will continue to receive 100% of their eligible variable pay, the memo added.
“For associates C3A grade and above, there will be no QVA (quarterly variable allowance) this quarter. This decision was taken after careful consideration as our performance for the quarter fell short of internal targets,” Kunnumal wrote in the memo on 10 October 2026.
As per reports, TCS typically awards 50% to 100% of eligible variable pay, and this is the first time in at least two years the company has explicitly told some staff they will receive no bonus at all. For senior employees at TCS, variable pay usually accounts for 15% to 20% of total CTC.
The move came two days after TCS announced its Q2 FY27 earnings on 8 October 2026. The company reported a 4% sequential rise in consolidated net profit to Rs 13,884 crore and 1.3% quarter-on-quarter revenue growth to Rs 73,188 crore. Closing headcount stood at 598,056 as of 30 September 2026, a net addition of 4,258 for the quarter and the third consecutive quarter of workforce growth. IT Services attrition for the last twelve months was 13.3%.
TCS has linked quarterly variable pay to office attendance since April 2024. Employees with 85% or higher attendance qualify for full payout, those between 75% and 85% get 75%, and those between 60% and 75% get 50%. Staff below the 60% threshold are not eligible.
