Infosys Q4 Bonus Cut to 65% Amid Profit Decline and Economic Headwinds
| 2025-05-15
Infosys trims quarterly staff bonus to 65% as profits fall and uncertainty looms
Infosys has announced a reduced 65% average performance bonus for Q4 FY25, down from previous quarters, amid profit decline and global economic challenges.
Infosys, India’s second-largest information technology services company, has announced an average performance bonus payout of 65 per cent for the fourth quarter of the 2024–25 financial year. The bonus, which is tied to employee performance, is scheduled to be distributed alongside May salaries.
The Q4 figure marks a significant reduction from previous quarters. In Q3 FY25, the company paid out an average of 80 per cent, while in Q2 the bonus stood at 90 per cent. The decline follows a weak earnings quarter and reflects growing caution within the sector due to macroeconomic uncertainties.
Profit pressure weighs on payouts
The announcement comes in the wake of Infosys reporting a net profit of Rs 7,033 crore for Q4 FY25—an 11.7 per cent decline compared to the same period the previous year. The dip was largely attributed to higher spending on sales and marketing. Meanwhile, revenue for the quarter grew 7.9 per cent year-on-year to Rs 40,925 crore, missing analysts’ expectations.
Despite the earnings pressure, the company’s profit exceeded internal estimates, though its outlook for FY26 revenue growth remains muted.
An internal email to employees attributed the bonus cut to broader economic factors. “Amidst the complex macro-economic environment in Q4, we remained client-focused and responsive to market needs,” the company stated.
Bonus allocation and employee impact
According to a report byThe Economic Times, the Q4 performance bonus is targeted at employees in Job Levels 5 and 6, which typically includes team leaders, managers, senior managers, and delivery managers.
The latest payout has disappointed some long-term employees. One senior staff member toldThe Economic Times that this was the lowest quarterly bonus he had received in his decade-long tenure with the company.
In February, Infosys issued salary revision letters, with most employees receiving an increment of between 5 and 8 per cent. However, the bonus decline has overshadowed the modest pay increases, raising concerns among staff about the company’s near-term outlook.
Industry-wide belt tightening
Infosys is not alone in signalling caution. The broader Indian IT services sector has entered a period of uncertainty, driven by global economic instability, tariff changes, and conservative client spending.
Tata Consultancy Services (TCS), India’s largest IT company, recently announced a deferral of annual salary hikes for its 607,000-strong workforce, citing similar business challenges. However, it confirmed that more than 70 per cent of employees received the full Quarterly Variable Allowance (QVA) for the January–March period.
Wipro, another major player in the sector, has yet to make any announcements regarding salary or bonus adjustments for 2025.
A testing time for Indian IT services
The Indian IT sector, a key component of the country’s economy and a major employer, has traditionally been resilient during global slowdowns. However, the current mix of high inflation in Western markets, slowing enterprise technology spending, and growing competition from automation tools is testing that resilience.
In this environment, companies like Infosys are under pressure to balance cost management with talent retention. Performance bonuses and wage revisions are key tools for managing morale and motivation, especially in a competitive labour market.
The 65 per cent bonus payout, while still substantial, reflects a strategic recalibration rather than a signal of financial distress. However, with revenue guidance for FY26 already on the lower side, further austerity measures cannot be ruled out.
Looking ahead
As Indian IT companies navigate an increasingly complex global business environment, their focus appears to be shifting toward efficiency, value delivery, and careful resource allocation. For employees, this could mean leaner bonus cycles and delayed wage increases in the short term.
For clients and investors, it serves as a reminder of the sector’s close linkage to global demand cycles and the broader economic mood.
Microsoft Layoffs Spark Online Debate Over Job Security in Tech and Government Sectors
Microsoft layoffs reignite debate on private vs government job security, with Indian social media users weighing career stability against high tech salaries.
|2025-05-15
India Urges IAEA Oversight of Pakistan's Nuclear Weapons Amid Tensions
India's Defence Minister Rajnath Singh has called on the IAEA to monitor Pakistan's nuclear weapons, citing concerns over safety and responsible handling.
|2025-05-15
Delhi Capitals Face Backlash Over Mustafizur Rahman Signing for IPL 2025
Delhi Capitals’ replacement of Jake Fraser-McGurk with Bangladesh's Mustafizur Rahman sparks #BoycottDelhiCapitals trend ahead of IPL 2025 resumption.
|2025-05-15
India May Cut Tariffs on 90% of US Goods if Deal is Reciprocal: GTRI
New Delhi could drop duties on 90% of US exports if Washington agrees to mutual tariff cuts, says Global Trade Research Initiative.
|2025-05-15
Hyundai Motor India Q4 Results: Profit Set to Fall Amid Flat Sales and Rising Competition
Hyundai Motor India Q4 FY25 earnings are expected to show a decline in profit and revenue, as competition and weak domestic demand weigh on performance.
|2025-05-15