Bangalore
Technology services firm Infosys has slashed average variable pay for employees by 70% for the first quarter of this fiscal, which is facing margin pressure.
“The margin impact in the current quarter is reflected on the performance bonus of this cycle. The average bonus payout for Q1 is 70% at the organization level,” the company informed employees in an e-mail.
According to the internal e-mail, delivery and variable pay for business-enabled tasks will be made in August, along with salaries. In the email, the company said it is “spurring growth momentum with investments in talent through recruitment and compensation revisions”.
“These investments have impacted margins in the immediate term,” Infosys said in an e-mail.
Rising employee costs have put tech firms under margin pressure. This e-mail from Infosys comes days after Wipro decided to withdraw convertible components of its mid- and senior-level executives for the same reason in the June quarter.
An association for technology workers, NITES (Senate of Neonatal Information Technology Employees), called the cuts by Infosys “unethical”.
“On the pretext of an uncertain economic environment, the company has illegally withheld the variable pay component of the employees,” it alleged.
“Infosys’ net profit for the previous quarter stood at ₹5,360 crore, or ₹12.78 per share, as against ₹5,195 crore, or ₹12.24 per share, in the same period a year ago. Revenue or turnover grew 23.6% to Rs 34,470 crore in April-June – the first quarter of the current financial year,’ argued NITES President, Harpreet Singh Saluja.
“Even after posting such financial results, the company is deducting 30% of variable pay which is a clear exploitation of IT employees,” he said.