Infosys has slashed its average variable bonus payout to 65% for the January-March quarter of FY25, citing a weak macroeconomic environment and a dip in profitability. The move affects employees in Band 6 and below, primarily covering junior and mid-level roles. While payouts vary by individual performance, sources said that high performers could receive up to 83%, whereas those with a ‘needs improvement’, rating will get none.
The reduction in Q4 bonuses marks a continued decline over the past year. In Q3 Infosys had disbursed 80% and in Q2, 90%. The internal communication acknowledged the challenges faced during the quarter, emphasising the company’s efforts to stay agile and responsive to client needs despite external headwinds.
The bonus cut follows a 12% year-on-year drop in net profit to Rs 7,033 crore for the March quarter. Additionally, Infosys offered a conservative revenue growth forecast of just 0–3% in constant currency for FY26, reflecting ongoing industry challenges. With global clients tightening technology budgets and extending decision cycles, IT majors continue to feel the squeeze.
This trend isn’t isolated. Rival Tata Consultancy Services has also adjusted its variable compensation. Senior employees at TCS received only 20–30% of their quarterly variable allowance (QVA) for Q4, down from prior quarters where up to 80% was withheld, even for those who complied with office attendance norms. The latest move marks the third straight quarter of reduced payouts for TCS leadership.