In Short:
Infosys has announced an average bonus payout of 80% for eligible employees for Q1 of fiscal 2024-25, up from 60% previously. This increase comes after the company reported a 7.1% year-on-year rise in net profit and a 3.6% revenue growth. Employees expressed satisfaction, noting it’s one of the best bonuses seen recently. Variable pay varies between employee levels, reflecting individual performance.
Infosys, a prominent player in the IT services sector, has initiated its performance bonus payouts for the fiscal year 2024-25, offering eligible employees an average bonus of 80% for the first quarter ending in June. This increase is expected to generate a positive sentiment across a significant section of the technology workforce.
This latest payout represents a notable increase from the previous quarter ending March 31, during which the second largest IT services firm in India provided an average bonus of 60% of the target.
According to an Infosys employee who wished to remain anonymous, “This is the best we have seen in some time.” This average percentage pertains to bonuses awarded to employees at band six (E6) and below, who constitute a substantial portion of the Bengaluru-based company’s workforce.
Strong Financial Performance
The bonus payout comes on the heels of Infosys leading industry growth in the first quarter of fiscal 2025, reporting a year-on-year net profit growth of 7.1% and revenue expansion of 3.6%, in contrast to subdued results from its top-tier competitors. The firm has also revised its revenue guidance for FY25 to a range of 3-4% in constant currency terms, citing a resurgence in business demand and a favorable market environment over the past two quarters.
In an email sent to employees, Infosys stated, “Q1 (April-June) quarter was marked by strong and broad-based growth, driven by our unique service offerings and your unwavering commitment. Your dedication has fortified our diverse and dynamic portfolio, and our enhanced GenAI capabilities have deepened our client relationships.”
Individual Performance and Variability
Bonus payouts have varied based on individual performance and contributions during the quarter. The heads of delivery units determine the specific percentages for individual employees according to the budget allocated to them.
According to the email reviewed by ET, “In line with our organisational goals on building a high-performance work culture, we have continued to drive performance differential while closing bonus payouts as well.”
For this quarter, it has been reported that the variable pay ranged between 75% and 84.5% for employees in the E6 category, between 77% and 86% for E5, and between 80% and 88% for E4. In comparison, the figures for the previous quarter (Q4 of FY24) were 54-60% for E6, 62-68% for E5, and 70-76% for E4.
Employee Classifications and Previous Practices
Infosys has yet to respond to requests for comment regarding these developments. The classification of employees ranges from E0–E2, which includes freshers and technical leaders, to E3–E6, which covers mid-level roles from project managers to vice presidents. E7 and above are designated as senior-level employees.
Sources indicate that this latest payout aligns with the levels provided during the June quarter of the previous fiscal year, as confirmed by at least two employees.
Continuing its recent practice, the company has not disclosed unit-wise average performance payouts in individual communications to avoid potential dissatisfaction among employees.
Future Salary Adjustments
Under the leadership of Salil Parekh, Infosys had previously frozen salary hikes in FY22 to conserve cash resources. The annual appraisal cycle resumed in October, and the company released salary revision letters for the last cycle in December 2023. However, employees are still awaiting their salary revision letters for the appraisal period from September 2022 to October 2023.
For the current cycle, the salary revision letter, typically distributed in June with retroactive implementation from April 1, is still pending. Additionally, in December, Infosys announced salary increases for many employees, effective April 1, 2023, although these hikes did not apply to entry-level workers.
