After rolling out an average variable payout of 80% for two quarters, Indian IT major Wipro offered an average of more than 85% to its employees for the third quarter of the current fiscal, according to two sources in the company.
In the first and second quarters of this fiscal, the IT firm rolled out average of 80% and 81%, respectively. However, another source in Wipro FullStride Cloud business line, which accounts for over a third of company’s revenue and has around 80,000 employees, said that the average variable pay for their business line in the September quarter was 100% and it has come to 89.74% in the December quarter.
A recent mail from Wipro to employees stated that the variable payout will be linked to three factors – revenue (40%), gross margin (30%) and total contract value (30%). Questions mailed to Wipro didn’t elicit any response till the time of going to press.
To boost margins, the company had deferred its salary hikes to employees from the second to the third quarter. The IT company has recently given annual hikes in the range of 6-8% to selective employees after deferring it by a few months. The hikes that the company rolled out was effective from December 1, 2023.
Wipro beat street estimates despite reporting a revenue of Rs 22,205 crore, down by 1.4% quarter-on-quarter (q-o-q). Despite stiff challenges of weaker demand, seasonal furloughs and salary hikes to employees, the company’s margins have been resilient, that fell to 16% in Q3, compared to 16.1% in Q2. Wipro expects the march quarter revenue from its IT services business segment to be in the range of -1.5% to 0.5% in constant currency terms. For Q3, the company had earlier guided revenue to be in the range -3.5% to -1.5% in constant currency terms.
Rival IT major Infosys, which rolled out variable payouts of around 80% for two quarters, reduced its average variable pay to 73% for the third quarter of current fiscal. The IT major had dipped variable pay to 60% for the March quarter of FY23, citing global macro-economic headwinds.