Infosys’ average variable payout for Q4FY23 has been reduced to 60 percent at an organisation level, a sign of the increasing stress on the IT industry in an increasingly uncertain macro environment particularly in the company’s key markets, and the impact of the banking contagion in the fourth quarter.
Impact of increasingly uncertain macro environment
The payout will be given along with the salary for May.
While the average payout is 60 percent, an employee’s final variable payout will depend on their unit or department’s guidelines, and varies for different pay grades and departments.
In Q1FY23, Infosys had lowered variable payout to 70 percent, which was then reduced to 65 percent in Q2.
Vigilance to changes in the market
The company said in its email to employees that it must remain vigilant to changes in the market, and must see the current climate as an opportunity to “rally as a group and remain committed to navigating the changing business landscape”.
“We have always been a resilient organization, responding to market disruptions effectively and striving to move ahead,” it told employees.
Revenue guidance missed
Infosys had missed its guidance for the year in revenue growth after it reported the numbers for Q4, posting a full-year growth of 15.4 percent when its guidance was at 16-16.5 percent.
Revenue in Q4FY23 came in at $4,554 million, a decline of 2.2 percent in reported terms and 3.2 percent in constant currency terms.
The IT major has guided for revenue growth of 4-7 percent in FY24, making this the first time since FY18 the company’s revenue will be in this guided range.
Infosys had said there was a one-time impact on revenue due to volume, but was also “a combination of cancellations and specific client issues”.
Close rival Wipro’s Chief Human Resources Officer Saurabh Govil had said during the company’s earnings call that overall, the company’s variable payout would be above 80 percent.