This IT company held back employees' variable pay - here is why
Two sources aware of the development told PTI that managers to the C-suite Level of the company will not get any portion of variable pay, while employee grades between freshers to team leaders will get 70 per cent of the total variable pay
IT company Wipro has held back variable pay of employees mainly due to pressure on margins, inefficiency in its talent supply chain and investment in technology, according to sources.
According to the sources, the company has informed employees in an email about the cut in variable pay.
Two sources aware of the development told PTI that managers to the C-suite Level of the company will not get any portion of variable pay, while employee grades between freshers to team leaders will get 70 per cent of the total variable pay.
"The company in the email has attributed lower margins in the first quarter due to inefficiency in its talent supply chain, project margins and investment in talent, technology and solution during the quarter," as per the sources.
Wipro on Wednesday reported about a 21 per cent year-on-year fall in its consolidated net profit to Rs 2,563.6 crore for the first quarter ended June 2022.
The profit for the period (attributable to the equity holders of the company) stood at Rs 3,242.6 crore in the year-ago period.
The net profit was down 20.6 per cent on a year-on-year basis.
Wipro's operating margin in the IT services segment decreased by 200 basis points to 15 per cent quarter-on-quarter. The operating margin was 17.7 per cent in the January-March 2022 period and 18.8 per cent a year ago.
When contacted, Wipro said, "There is no change to our earlier statement on salary increase, and hikes for our employees will be effective from September 1, 2022. We have also completed the first cycle of quarterly progressions effective July 1, 2022. We have no further comments on the quantum of variable pay".
Wipro had 2,58,574 employees as of June 30, 2022.
The company reported a marginally lower attrition rate of 23.3 per cent in the April-June 2022 quarter (on a trailing twelve-month basis) from 23.8 per cent recorded in the previous quarter.
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