Infosys, the country's second-largest IT services company, has announced an 85% average performance bonus payout to eligible employees for the second quarter ending September of the current fiscal year 2024-25. The bonus would be distributed to mid- and junior-level employees across delivery and sales groups, who make up the majority of the Bengaluru-based software company's over 3.15 lakh staff.
In an email to eligible employees, the company stated that the bonus will be credited together with their November income. Individual payout percentages, however, have varied depending on an employee's performance and contribution during the quarter.
"In Q2, we generated a great result with wide growth, cementing our market leadership. This accomplishment is a result of your constant commitment, our strategic focus on margin performance, and our industry-leading competence in Cloud and Generative AI. Your dedication has been critical in expanding our skills and providing outstanding value to our clients. Thank you for your essential efforts; we look forward to a future filled with limitless opportunities with you," the email stated.
For the second consecutive quarter, Infosys led industry growth, reporting a 4.7% year-on-year increase in consolidated net profit at Rs 6,506 crore on a revenue increase of 5.1% at Rs 40,986 crore, driven by the ramp-up of mega-deals and continued demand improvement in the financial services segment.
Importantly, the business revised its FY25 sales projection to 3.75-4.5%, up from its previous guidance of 3-4%.
The performance bonus average statistic includes payouts to employees in band six (E6) and lower.
At Infosys, E0 - E2 personnel vary from new hires to technical leaders, while E3 - E6 employees hold mid-level jobs. Employees at the senior level are classified as E7 and above.
In keeping with its new approach, the corporation has not provided unit-wise average performance pay-outs in individual emails to employees, likely in an attempt to avoid internal dissent among employees.
The reported distribution is slightly higher than the 80% average payout in the June quarter, owing to the IT giant's strong July-September growth quarter. It also represents a significant increase over the 60% average bonus distributed in the March quarter, as well as the fourth and final quarters of fiscal year 24.
Some employees ET spoke with anonymously agreed that the incentive is higher than that of larger rival Tata Consultancy Services (TCS). "We appear to have received a higher bonus than TCS," said an Infosys employee who declined to be identified.
Bellwether TCS is said to have paid an average bonus payout of 50-60% and reportedly rewarded those working from the office with a greater payout, in accordance with its most recent mandate to work from the office five days a week.
According to one of the employees, Infosys' bonus distribution is not tied to the company's return-to-office policy, which requires select employees to work from the office for 10 days per month.
"In line with our organizational goals on building high-performance work culture, we have continued to drive performance differentiation while closing bonus payouts as well," a subsequent email said.
Infosys stopped wage increases in FY22 to save money and began its yearly assessment cycle in October last year, releasing a salary modification letter for the last salary cycle in December 2023.
Meanwhile, Infosys staff are waiting for the September-October appraisal cycle adjustment for fiscal year 2023-24.
During the most recent second-quarter earnings conference in October, Infosys CEO and managing director Salil Parekh said that a wage increase would take effect in January 2025, with selective employees receiving the appraisal revision first, followed by all others in April 2025.
