TCS, Infosys, Wipro: How have IT majors fared in terms of variable pay for Q4 FY23

Indian IT services companies announced their Q4 FY 2022-23 results last month, post which they announced variable pay, or performance payouts, to their employees. The variable pay in IT services companies depends on the company’s overall performance, along with the performance of individual employees.

Major IT companies have cut back on variable pay, noting that the sector faced volatility due to market conditions. Business Today reported that IT companies are expected to dial back on variable pay in light of the volatility faced by the sector due to the banking crisis that unfolded earlier this year, even before the Q4 FY 23 results were out.

Infosys

Infosys would be rolling out 60 per cent variable pay on average to its employees in Q4 FY 2022-23 which would be disbursed with salary of May, as per an internal communication shared by the company to employees.

This cutback on variable pay is in line with the company’s disappointing Q4 FY 23 results. Infosys posted a consolidated net profit of Rs 6,128 crore, down by 15.68 per cent from a PAT of ₹7,283 crore in the preceding quarter. The IT services company also missed its annual guidance, reporting a full-year growth of 15.4 percent against the projected 16-16.5 percent.

The company also noted in an internal communication that the past quarter was riddled with unforeseen events and volatile market conditions.

“While FY23 was a year of strong performance overall, the quarter that went by was impacted by a volatile market and unforeseen events. We need to rally as a group and remain committed to navigating the changing business landscape,” the email read.

Wipro

IT major Wipro would roll out 80.25 per cent variable pay to employees, as per an internal communication sent to employees.

The communication read, “Given our overall performance across Wipro, and with the company multiplier at 1, the variable pay for Q4 FY 2023 is 80.25% for employees whose payout is linked to Wipro’s overall financial performance.”

Wipro’s revenue for Q4 FY23 declined sequentially by 0.6 per cent. The company guided for a revenue drop between 1 per cent and 3 per cent in the April-June quarter, owing to a negative demand outlook.

Tata Consultancy Services (TCS)

TCS, India’s largest IT services company, announced 100 per cent variable pay to employees up to C2 band, as per an internal email. C2 band includes employees relatively lower in the hierarchy at the company.

The internal communication accessed by Business Today read: "A decision has been taken to pay 100% of the Quarterly Variable Allowance (QVA) for all employees up to C2 or equivalent grades covered under this plan.”

Variable pay employees above the C2 grade would depend on business unit performance, the internal communication highlighted.

“The individual pay-out for C3A or equivalent grades and above (as applicable) may vary, depending on the business unit performance,” the note read.

The IT sector variable pay rolled out in Q4 FY23 has been reflective of the cautious approach taken by the companies in light of the macroeconomic slowdown.

Also Read: TCS, Infosys, Wipro: Are huge bench sizes dragging down Indian IT majors? - BusinessToday

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