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 TCS 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.
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 BSE Sensex 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 is planning to create a workforce of between 5,900 and 8,900 forward-deployed engineers (FDEs), according to CEO K Krithivasan.
"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.
Garvit Bhirani is a journalist based in Gurugram. He is a Deputy Chief Content Producer at LiveMint, where he covers national and international news stories, focusing on accuracy and compelling storytelling for readers.
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With a total of six years of experience in journalism, he has previously worked with Vaco Binary Semantics for Google, taking on the role of news curation lead, and reported from the field on health, education, and agriculture stories for 101reporters and News9. He has also served as a content editor for entertainment and news media organisations.
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Garvit holds bachelor’s and master’s degrees in journalism and mass communication from Guru Gobind Singh Indraprastha University and Gurugram University, respectively. During college days, he joined India’s only non-profit student journalism network, where he anchored daily news updates and produced his own weekly show called ‘Data Fix’.
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He was selected for the YES Foundation Media for Social Change Fellowship in Delhi, the Talking Data to the Fourth Pillar residential workshop, and the VOICE Fellowship in Pune.
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He holds certificates in COVID-19-verification reporting, data journalism, food & agriculture, tech policy, media literacy and countering misinformation, and tackling election disinformation courses from Thomson Foundation, IndiaSpend, The Dialogue, US Mission in India, and AFP.
<br><br> He can be reached on <a href="https://www.linkedin.com/in/garvit-bhirani">LinkedIn</a> or on <a href="https://x.com/GarvitBhirani">@garvitbhirani</a> on X
