In a sign of approaching headwinds, IT firm Infosys has cut the average variable payout at an organisational level to 60 per cent for the fourth quarter of the financial year 2022-23 (FY23), according to a report in The Financial Times.
Infosys had reduced the variable payout to 70 per cent in the first quarter of FY23, which was then lowered to 65 per cent in the second quarter. "The performance bonus payment for delivery and business enabling functions for Q4 FY23 is scheduled to take place in the payroll of May 2023," Infosys told its employees.
The company said an employee's final variable payment will be determined by their unit/department guidelines.
"While FY23 was a year of strong performance overall, the quarter that went by (Q4) was impacted by a volatile market with unforeseen events. As we remain vigilant to the changes in the market, we must also see this as an opportunity to rally as a group and remain committed to navigating the changing business landscape," Infosys has told the employees.
A month ago, IT companies were saying things would improve in October-November. However, it looks like the same would get pushed to early 2024, Aditya Mishra, managing director and chief executive officer of CIEL HR, said.
Infosys registered a 15.4 per cent growth in revenue in constant currency terms in FY23, which was below the lower end of its guidance of 16-16.5 per cent. However, the IT major met its operating margin target, which at 21 per cent was at the lower end of the guided range of 21-22 per cent.
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Infosys gave a revenue guidance of 4-7 per cent in constant currency terms for FY24, which shows the challenges of the present fiscal. Operating margin is seen in the range of 20-22 per cent.
The company's consolidated net profit of Rs 6,128 crore and revenue of Rs 37,441 crore in Q4 were below street estimates.