Infosys will reportedly pay its employees 65 per cent variable pay for the second quarter (Q2), the second time in a row in this financial year.
This comes after cutting their variable pay by 30 per cent in the previous quarter.
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Company communication
The company wrote in an internal mail, “The average payout at an organization level is 65% for Q2FY23.
Individual payout percentages will differ based on individual performance and contribution for the quarter.”
“On the basis of the company’s performance in the Q2 FY’23, the board has approved performance bonus payouts as mentioned below JL 4- 60%, JL 5 – 60%, JL 6 – 60%,” the internal communication noted.
Payment to take place this month
Reports say that variable pay will be available to all eligible employees and will be made in the November payroll cycle.
Further information on the variable pay is expected to be delivered to the employees on Nov 17.
The company has been cutting back on variable pay since the past few quarters.
The average variable payout made to employees in the April to June quarter was 70 per cent.
Poor economic conditions in the West to blame?
The company said that this was because of pressure on margins due to the wider economic downturn in the West.
The payout for employees working in the United States and Canada will be completed alongside the second biweekly November payroll.
The variable pay percentage for the July-September quarter was reportedly lower than the 70 per cent average it had provided during the April-June quarter.
However, Infosys claimed that operating margin pressure was responsible for this difference.
No slowdown in profits
For the three months that ended on September 30, Infosys paid its business process management (BPM) employees an average of 60 per cent variable compensation.
As per an email issued to the appropriate group of BPM employees the company has paid out for J4 to J6 levels, or systems engineer to project manager levels.
With most of their BPM employees based in India, Infosys employs over 50,000 people worldwide.
Compared to the September 2021 quarter’s net profit of Rs 5,421 crore, Infosys declared a net profit of Rs 6,021 crore for the September 2022 quarter.
This is a growth of 11.1 per cent.
Fellow IT majors follow suit
On top of that, its sales increased by 23.4 per cent to Rs 36,538 crore from Rs 29,602 crore in the same quarter last year.
It’s not just Infosys, but other companies like TCS and Wipro are also cutting back on variable pay because of pressure on margins.
TCS announced that they would hand out variable pay to only 70 per cent of its employees.
Wipro announced that they would compensate only 85 per cent of their employees with variable pay in Q2FY23.
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