Wipro holds back variable pay for June quarter for mid, senior-level employees: Read the email to staff – Times of India

The rising global uncertainty seems to be hurting IT companies. The country’s fourth largest IT services provider Wipro is holding back the variable payouts of mid-to-senior level employees for the June quarter. Wipro gives out variable pay every quarter. As per the company’s structure, these employees belong to C bands and above (managers to C-suite level). The company communicated the decision to employees in an internal note sent a few days ago. Wipro cited lower margins as the reason for the decision.
What the email says
“We’ve seen some continued pressure on operating margins. Our Q1 margins were lower at 15% due to inefficiency in our talent supply chain, project margins and our investments in talent, technology and solutions during the quarter, which will continue as these are directed toward long-term value building… Given our underperformance on margins this quarter, our variable pay takes a hit,” the email to employees said.
Employees who will be getting the variable pay
The company’s employees in A & B Bands (freshers to team leader levels) will receive 70% of the target variable pay depending on their billability. Wipro gives the variable pay to employees in the A & B Bands on the basis of the their billable days for the quarter. For employees in the B and C and above bands, the variable pay is linked to the company’s financial performance. The A & B Bands will reportedly receive the reduced pay along with their August’s salary. Sales incentives for employees in the sales teams too have reportedly taken a hit. The variable pay is based on three metrics: Revenue, order book and margins.
What Wipro said
When TOI contacted Wipro on the matter, the company said, “Hikes for our employees will be effective from September 1. We have also completed the first cycle of quarterly progressions effective July 1.”
While announcing the company’s results in July, CFO Jatin Dalal said, “We had mentioned at the beginning of last quarter that our margins will remain lower as we are making conscious investment in our business. And this is going to be there for a few quarters.” He added that the margins will improve from this point as they have bottomed out.