India’s second largest IT firm Infosys has reportedly slashed the employees’ variable pay for the first quarter of the ongoing fiscal amid shrinking margins.
At an organisation level, the average variable payout is 70 percent, according to a report by Moneycontrol, which cited an email sent to Infosys employees. This comes days after Infosys’ rivals such as TCS and Wipro deferred or cut variable pay for the April-June quarter due to margin pressure.
IT companies’ margins have been hit by rising employee costs such as salary outgo and paying a premium for hiring talent, even as these companies still grapple with high attrition.
Infosys’ email to staff said that the company is fueling growth momentum with investments in talent through hiring and compensation revisions.
“While these investments have impacted margins in the immediate term, we are making structured efforts to improve our performance in the quarters to come,” the report said, citing email.
The variable pay will be paid along with August’s salary. While the average pay-out is 70 percent, an individual employee’s final variable amount will depend on several other factors including department’s guidelines.
Earlier, Wipro, India’s fourth largest IT services provider by revenue, announced that it is holding back the variable payouts of mid to senior-level employees for the June quarter because of pressure on operating margins.
Earlier this week, the Bengaluru-headquartered firm said in an email that executives belonging to C bands and above (mid-managers to C-suite level) will not get any variable payouts, while employees in A and B categories (freshers to team leader levels) will receive 70 per cent of the target variable pay for the quarter subject to a billability limit. Employees in the A and B categories will receive reduced pay along with their salary for August.
