Tweet
India's second largest IT services company Infosys has scaled back the average variable payout of employees to about 70 per cent for the June quarter amid margin squeeze and high employee costs, according to sources.
Recently, Wipro held back the variable pay of employees mainly due to pressure on margins, inefficiency in its talent supply chain and investment in technology. Larger rival Tata Consultancy Sevices has reportedly delayed quarterly variable compensation payout for some employees by a month.
According to the sources, Infosys has reduced variable payout for the June quarter or Q1 FY23 to about 70 per cent and the employees have been informed about the same.
An e-mail sent to Infosys on the issue did not elicit a response.
Last month, Infosys reported a lower-than-estimated 3.2 per cent rise in June quarter net profit amid escalating costs. However, the company raised its full-year revenue growth outlook to 14-16 per cent citing strong demand and robust deal pipeline.
The company maintained the margin guidance at 21-23 per cent but made it clear that with the increase in cost environment, it will be at the lower end of the margin outlook. Infosys' operating margins were at about 20 per cent in Q1 FY23.
Higher employee benefit expenses, sub-contracting costs, and travel expenses had pushed up overall costs for the Bengaluru-headquartered firm in the June quarter.
Recently, Wipro held back the variable pay of employees mainly due to pressure on margins, inefficiency in its talent supply chain and investment in technology. Larger rival Tata Consultancy Sevices has reportedly delayed quarterly variable compensation payout for some employees by a month.
According to the sources, Infosys has reduced variable payout for the June quarter or Q1 FY23 to about 70 per cent and the employees have been informed about the same.
An e-mail sent to Infosys on the issue did not elicit a response.
Last month, Infosys reported a lower-than-estimated 3.2 per cent rise in June quarter net profit amid escalating costs. However, the company raised its full-year revenue growth outlook to 14-16 per cent citing strong demand and robust deal pipeline.
The company maintained the margin guidance at 21-23 per cent but made it clear that with the increase in cost environment, it will be at the lower end of the margin outlook. Infosys' operating margins were at about 20 per cent in Q1 FY23.
Higher employee benefit expenses, sub-contracting costs, and travel expenses had pushed up overall costs for the Bengaluru-headquartered firm in the June quarter.