Infosys Slashes Q3 Bonuses Right Before Annual Pay Hikes; Details Inside

For the October-December quarter, Infosys reported better-than-expected results, with an 11.4 per cent increase in net profit to $800 million and a 7.6 per cent rise in revenue to $4.9 billion

IT services company Infosys has announced a performance bonus averaging 80 per cent of the target for eligible employees for the third quarter ending in December, ahead of the expected annual pay hikes to be rolled out before the end of March, according to The Economic Times report.

The average payout of variable pay has reportedly decreased by up to 10 percentage points from the second quarter for employees across delivery and sales units, who make up the majority of the Bengaluru-based software giant's workforce of over 323,000, states the report.

“In line with our organisational goals on building high-performance work culture, we have continued to drive performance differentiation while closing bonus pay-outs as well,” the company said in an email to select employees, as per the report.

“There has been a 5-10-percentage-point drop compared to last quarter when some people even got 100 per cent of the performance bonus. Looks like Infosys is conserving funds to fund pay hike expenses,” an employee told ET, states the report.

In the July to September quarter, employees received an average of about 85 per cent of their variable pay. This time, employees at the unit level received an average of around 75 per cent, with 100 per cent for those rated "outstanding," 85 per cent for "commendable," and 70 per cent for "met expectations" at JL5 & JL6, according to another employee in the report.

Team leaders are at the JL5 (Job Level 5) rank, while those below include software engineers, senior engineers, system engineers, and consultants. JL6 and above include managers, senior managers, delivery managers, and senior delivery managers, excluding vice presidents.

Rival Tata Consultancy Services also released its quarterly variable pay for the October-December period in February, with about 70 per cent of employees receiving 100 per cent of their variable pay. However, senior-level employees continued to see lower payouts ranging from 20 per cent to 40 per cent, as reported by ET on Monday.

Infosys stated that it will credit the bonus along with the February salary, as noted in the report.

The lower pay-outs were anticipated, despite Infosys raising its revenue guidance for the current fiscal year to 4.5 per cent-5.0 per cent.

“Q3 was marked by strong, broad-based growth, driven by our strategic digital offerings, key initiatives, market positioning and structured approach to margin expansion. This success is a reflection of your dedication, and we deeply appreciate your efforts,” the email to employees stated.

For the October-December quarter, Infosys reported better-than-expected results, with an 11.4 per cent increase in net profit to $800 million and a 7.6 per cent rise in revenue to $4.9 billion.