Infosys to Award 85% Bonus to Employees
Infosys has announced an Infosys to award 85% average performance bonus for its employees for the September quarter. The bonus recognizes the company’s strong performance in Q2 and will awarded to employees in Band 6 and below, including junior to mid-level staff in delivery and sales teams. These employees make up the majority of Infosys’ workforce. Some Band 3 employees reported receiving up to 100% of their variable pay, based on individual performance.
Bonus Details and Payout Timing
Infosys informed employees of the bonus through letters sent on November 25 and 26. The company clarified that the bonus would vary based on individual performance and will included with the November salary. This 85% payout is an increase from the 80% bonus in the previous quarter and a significant rise from the 60% bonus in Q4FY24.
Why the Infosys to award 85% Bonus?
Infosys attributed the bonus to the company’s strong Q2 performance, with a focus on cloud computing and generative AI (GenAI) services. The company highlighted how this growth is a result of employees’ hard work and its strategic focus on margin improvement and leadership in these innovative fields.
Financial Performance and Growth
In Q2FY25, Infosys reported a 2.2% increase in net profit, reaching ₹6,506 crore. Revenue grew by 4.2% to ₹40,986 crore. The company has increased its FY25 revenue growth forecast to 3.75-4.5%, up from the estimate of 3-4%. These results reflect the company’s resilience and continued growth.
Comparison with TCS and Other IT Firms
Infosys’ announcement comes shortly after Tata Consultancy Services (TCS) cut variable pay for senior employees due to a slowdown in demand. While some TCS employees received only 20-40% of their payouts, others received nothing, despite following the company’s work-from-office policy. However, junior employees at TCS received 100% of their variable pay.
Infosys, in contrast, has not tied its bonus to a work-from-office mandate. The company’s policy requires certain employees to work from the office for at least ten days per month.
Industry Challenges and Variable Pay Cuts
The broader IT sector is facing challenges. Many companies, including top firms, have reduced variable pay for senior employees due to constrained client budgets. Some senior employees have experienced reductions of 20-30% in their variable pay. These cuts are largely the result of soft business performance in Q2 and a weaker outlook for Q3, which is expected to be impacted by furloughs and fewer working days for clients. For some employees, this marks the second consecutive quarter without a variable pay bonus.