Indian IT conglomerate Infosys will reportedly slash employees' variable pay up to 60% on average, which is to be paid with the salary of May 2023.
It is a sign of the increasing stress on the IT sector in an increasingly uncertain macro environment, particularly in the company's key markets, and the impact of the banking contagion in the fourth quarter.
As per the mail sent to Infosys employees, the exact payout is subject to their respective department's guidelines and is expected to differ based on pay grades and departments.
In the first quarter of FY2023, Infosys lowered variable payout to 70%, which was then reduced to 65% in the second quarter.
"While the financial year 2023 was a year of strong performance overall, the quarter that went by was impacted by a volatile market and unforeseen events," an email sent to employees said.
The company in its mail, added that it must remain vigilant to changes in the market and must see the current climate as an opportunity to "rally as a group and remain committed to navigating the changing business landscape."
"We have always been a resilient organization, responding to market disruptions effectively and striving to move ahead," the mail added.
Infosys had missed its guidance for the year in revenue growth after it reported the numbers for the 4th quarter, posting a full-year growth of 15.4% when its guidance was at 16-16.5%.
The revenue in the 4th quarter of FY2023 came in at 4554 million USD, a decline of 2.2% in reported terms and 3.2% on a constant currency basis.
The company had guided for revenue growth of 4-7% in the current financial year 2024, making this the first time since the financial year 2018 the company's revenue will be in this range.
There was a one-time impact on revenue due to volume, but also "a combination of cancellations and specific client issues."
