Infosys, the Bengaluru-based IT giant, is about to distribute the quarterly performance bonus to eligible employees for the July-September period.
Individual payout will be based on the performance of the employees for the quarter, and the average payout is expected to be 80%.
Staff classified as under position level 6 (PL 6 manager) and below, that is those below manager category barring entry level positions, are scheduled to obtain the variable pay.
Unit delivery manager will finalise the distribution of the payout for their respective units and inform eligible employees this week.
Infosys had frozen salary hikes in FY23 to conserve cash but started its annual appraisal cycle in October. The payout of the performance bonus comes at a time when Infosys and other top tier IT companies have reported muted revenue growth in the September quarter. Despite the adverse environment, Infosys managed to stay relevant and build a solid foundation for future market share expansions in Q2.
The IT major's operating profit reached ₹8,274 crore in Q2 FY24, with an EBIT(Earning Before Interest and Taxes) margin of 21.2%. The topline increased by 6.72% and the profit increased by 3.17% YoY in the said quarter. As compared to the previous quarter, the revenue grew by 2.8% and the profit increased by 4.49%.
The 80% payout is consistent with the first quarter of the fiscal year, but higher than the previous quarters in FY22, where payouts ranged from 60% to 70%. In the quarter ended March this year, Infosys paid out 60% as variable pay.
The annual appraisal cycle at Infosys happens from October to September of the following financial year. The company generally discloses employee ratings by January and releases the letter of pay raise to employees in June. However, the IT industry as a whole has witnessed a decline in headcount in recent months due to industry-wide growth constraints.
Infosys addressed the weak demand environment in its communication to its employees.
The company reported a minimal rise of 3.2% YoY with a revenue growth at ₹38,994 crore. The tech giant has revised its revenue growth guidance for FY24 to 1%-3.5%. This is due to a reduction in tech expenditure by global clients, which has prompted IT firms to conserve cash and adopt a cautious approach to employee expenses, including fresh hiring.
The $245-billion IT industry has faced pressure due to global macroeconomic concerns and ongoing geopolitical tensions like the Israel-Palestine conflict, resulting in a reduction in technology expenditure.
