In an email to employees, Infosys attributed the payout to its robust Q2 performance, emphasising its focus on cloud and generative AI (GenAI) services.
Infosys, the country’s second-largest IT services firm, has declared an 85% average performance bonus for the eligible employees for the September quarter, according to sources. The bonus will be disbursed to Band 6 and below employees, encompassing junior to mid-level staff across delivery and sales units, who collectively form the majority of Infosys’ workforce.
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Additionally, a couple of employees in Band 3 told FE that some of them received up to 100% variable pay depending on their performance.
Employees were notified of the variable payout via letters sent on November 25 and 26.
Infosys said the bonus amount will vary based on individual performance, and eligible employees will receive the payment along with their November salary.
Infosys did not respond to an email seeking comment at the time of going to press.
The Q2 bonus of 85% marks an improvement over the 80% average payout in the previous quarter and a significant increase from the 60% bonus issued in Q4FY24.
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In an email to employees, Infosys attributed the payout to its robust Q2 performance, emphasising its focus on cloud and generative AI (GenAI) services. “In Q2, we delivered a strong performance with broad growth, reinforcing our market leadership. This success is a testament to your unwavering dedication, our strategic focus on margin performance and our industry-leading expertise in Cloud and GenAI,” the email read.
The company reported a 2.2% sequential increase in net profit for Q2FY25 to 6,506 crore, while revenue grew by 4.2% sequentially to 40,986 crore.
Infosys also revised its FY25 revenue growth guidance upwards to 3.75-4.5%, compared to the earlier range of 3-4%.
This development comes days after sector leader Tata Consultancy Services (TCS) slashed variable pay for senior employees in the September quarter due to demand uncertainties.
While some TCS employees received only 20-40% of their payouts, others received none, despite adhering to the company’s mandatory work-from-office policy.
However, people in the know had told FE that TCS employees at the junior grades got 100% payouts.
Infosys has not tied its bonus to its work-from-office mandate. The company’s current policy requires select employees to work from the office for at least ten days per month.
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It’s not only TCS, but other top IT services firms have also cut the variable pay of senior employees due after the September quarter as the sector continues to face headwinds on account of muted client budgets, industry sources said.
“Seniors who are in people manager roles (those overseeing or managing projects but do not have billable hours on their profile) are seeing 20-30% reduction in the variable pay,” Gaurav Vasu, founder and CEO, cognitive intelligence platform Unearthinsight, said.
He added that this is a result of a soft business performance in Q2 in addition to a weak outlook for Q3 given the quarter will see furloughs and fewer working days for most IT clients.
For some employees, team managers and team leads at IT firms, this is the second consecutive quarter where variable pay has not been given, sources told FE.
