TCS raises Q3 variable pay for mid-senior staff to 80%.
Annualised AI revenue rises 17.3% to $1.8bn.
Q3 revenue at ₹67,087 crore; profit drops 13.9%.
Order book steady with $9.3bn TCV despite moderation.
TCS Hikes Quarterly Variable Payouts to 80% After Two Years of Cuts; Is AI the Real Reason?
The move comes as the IT major continues its workforce realignment to match AI-driven priorities, with management remaining optimistic about demand in 2026
TCS Ties Up With Chipmaker AMD to Co-Develop AI Solution
Summary
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The Tata Consultancy Services (TCS), the country's largest software exporter, has raised quarterly variable payouts for mid- to senior-level employees to as much as 80% for the third quarter, Moneycontrol reported.
The move comes as the IT major continues its workforce realignment to match AI-driven priorities, with management remaining optimistic about demand in 2026, it said.
This marks a significant shift after nearly two years in which variable payouts for mid- and senior-level employees were cut to 20–50%, the report said.
TCS aspires to become the world's largest AI-led technology services company. It is also enabling clients to transform themselves across the full AI stack, from infrastructure to intelligence. It has announced to register $1.8bn in annualised AI revenue and worked on 5,000 projects to date.
Today, TCS' HyperVault unit and OpenAI also agreed on a multi-year partnership to develop AI infrastructure in India.
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TCS Q3FY26 Results
TCS reported a mixed set of results for the December quarter, with revenue beating expectations but profit taking a hit due to one-off charges. Consolidated revenue rose 4.8% year-on-year to ₹67,087 crore, while net profit fell 13.9% to ₹10,657 crore, missing.
Order momentum showed signs of moderation. Total contract value (TCV) for the quarter stood at $9.3bn, down from $10bn in the previous quarter and slightly below the $9.4bn reported in Q1 FY26. Even so, TCS highlighted strong traction in artificial intelligence-led services, with annualised AI revenue rising 17.3% sequentially to $1.8bn.
“If this trend continues, we will be somewhere closer to about $38-39bn for the year, which will be one of the highest. We believe this order book will help us in growing in FY27 as well. We are now quite comfortable with the order book itself,” K Krithivasan, CEO of TCS, said during the company’s earnings conference last month.
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According to brokerage firm Choice Institutional Equities, most Indian IT services companies demonstrated resilience in Q3FY26, reporting flat to nearly 4% quarter-on-quarter (QoQ) revenue growth despite seasonal impacts, Business Today reported. This highlighted steady enterprise adoption of AI as one of the reasons.