Infosys to pay only 60% performance bonus to BPM employees

The country's second-largest IT services company Infosys Ltd has given out 60% average variable pay to certain employees in its business process management (BPM) vertical for the September quarter. The variable payout is lower than 70% paid during the previous quarter.

On the basis of the company's performance in July-September 2022, Infosys said its board has approved performance bonus payouts for employee levels JL 4, JL 5 and JL 6 (from system engineers to project managers), which are at 60%, an internal mail shared by Infosys showed.

Infosys said the actual payout percentage is based on employees’ differentiated performance levels and recommendations by senior management from their respective business units as per the company guidelines. "Based this, your Q2 performance bonus payout is at 63%," said Infosys letter, adding the employees will receive their performance bonus in October 2022.

Among its peers, TCS, which is India's biggest IT services company, last month said it'll award 100% variable pay to 70% of its employees in Q2, while the remaining 30% will be paid the variable bonus as per the performance of their business unit performance. TCS has a total of 6.16 lakh employees.

Wipro also said the tech company will pay 100% variable pay to 85% of staff in the September quarter.

Notably, Infosys recorded an 11% year-on-year rise in net profit in the July-September quarter FY 2022-23 at ₹6,021 crore, as compared to ₹5,421 crore in the corresponding quarter last year. Its revenue grew 23.4% YoY to ₹36,538 crore during Q2.

Reacting to the development, Harpreet Singh Saluja, president, NITES (Nascent Information Technology Employees Senate), a Pune-based employee union, said Infosys has once again reduced employees’ variable pay by 40%. "The company, at their will, is reducing the variable pay component of employees, without giving any reasonable cause. On one side, employees are struggling with inflation and on the other side, Infosys is increasing deductions in variable pay."

He said Infosys's large deal wins for Q2 FY23 were robust at $2.7 billion, the highest in the last seven quarters. "Hence, it is completely unethical and unacceptable from the employees' perspective who are the backbone of the organisation," he said.

Infosys' total employee headcount as of September 30, 2022, stood at 3,45,218, up from 3,35,186 during the previous quarter. Of this, BPM employees in India stand at 50,000. Infosys' attrition rate, like its peers, remains high at 27.1% as of September 30, 2022.

Separately, the IT major is seeking shareholders' approval for its ₹9,300-crore share buyback between November 3 and December 2 this year. The buyback size is 14.84% and 13.31% of the aggregate of the total paid-up share capital and free reserves of the company. The Infosys shares are trading 1.73% down at ₹1,526.20 from the previous session close of ₹1,552.30.