India’s second-largest IT services firm, Infosys, has informed some employees that their performance bonuses for the fourth quarter of financial year 2024-25 will be lower, amid declining profits, The Economic Times reported.
According to the report, senior HR executives and managers conveyed the development to members of a large delivery unit during a conference bridge call last week. A staff member, speaking on condition of anonymity, said similar discussions could take place with other teams as well.
However, the top executives termed the bonus cuts as a part of a “passing phase”, adding that they would try to compensate with better bonus recommendations for eligible performing employees once the growth cycle returns, the report added..
The update comes shortly after Infosys reported a Q4 net profit of ₹7,033 crore — an 11.7 per cent drop from a year earlier. The decline was attributed to increased selling and marketing expenses. However, its revenue grew 7.9 per cent to ₹40,925 crore.
While the profit was above estimates, revenue missed Street expectations. While announcing the results, the company also predicted weaker than expected revenue growth for FY26.
Cloudy journey ahead for Indian IT companies
Infosys is not the only IT company signalling a difficult year ahead, with global economic uncertainty, tariff disruptions and cautious client spending clouding the sector’s outlook.
India’s largest IT firm, Tata Consultancy Services, last month said that it would defer annual wage hikes to its 607,000 employees due to the business uncertainties triggered by the tariff issues. However, it added that it has paid out 100 per cent of the Quarterly Variable Allowance (QVA) to more than 70 per cent of its workforce for the January-March quarter.
Meanwhile, Wipro has remained silent on salary hikes so far, according to the report.
Infosys distributed salary revision letters to its employees in February, with most getting a 5 to 8 per cent hike. Moreover, for Q3 FY25, the company reportedly paid an average 80 per cent performance bonus to eligible employees across the delivery and sales units.