Infosys Rolls Out 90% Variable Pay For Q2 FY25

IT major Infosys will pay 90% variable pay to its employees for the second quarter of the fiscal. This comes as the company beat market expectations in the quarter and raised its full year guidance. 

Variable pay is a component of an employee's salary that is contingent on the performance of the employee and the company. It is also called performance-linked pay. 

The bonus payout was issued to all eligible junior and mid-level employees on November 26. The 90% bonus is albeit not a blanket rate, and will vary to individual employees’ performances. In the last quarter, the company had reportedly issued variable pay of 80% to the employees. 

Infosys raised its revenue forecast in constant currency terms for the financial year-ending March 2025 to 3.75-4.5%, up from its earlier projection of 3-4% for the period.

In the second quarter, the IT major's results showed a 4.3% increase in revenue over the previous three months to Rs 40,986 crore for the quarter ended September. The margin guidance for the fiscal was retained at 20-22%. 

The company saw demand environment improve in the quarter as it saw discretionary spending pick up in the BFSI sector, and the outlook for the North America region improved. In Q2, the large deal total contract value came in at $2.4 billion, with 41% being net new. This compared with $4.1 billion, its highest ever recorded in the first quarter. The number of active clients stood at 1,870, with 86 added during the quarter.

In contrast, Reportedly, Tata Consultancy Services (TCS) has cut variable pay for its employees for the second quarter. The company, per reports, has issued around 20-40% variable payout to some employees while some were not even issued variable payout.

TCS’s profit fell in the second quarter missing estimates, even as its revenue rose during the period. Profit of the IT major was down 1.1% at Rs 11,909 crore in the July-September period, which compared to a Bloomberg estimate of Rs 12,543 crore. The company's revenue rose 2.6% to Rs 64,259 crore, compared to the Bloomberg estimate of Rs 64,186 crore.