Wipro holds back variable pay of mid, senior employees in June quarter

Indian IT services provider Wipro has reportedly decided to hold back the variable pay of its mid and senior-level executives in the June quarter due to operating margins pressure. The company apparently sent an email to its employees in the C band and above stating that they will not receive any variable payouts, but the A and B bands will receive 70 per cent of the target payout. 

The email stated that their Q1 margins were lower at 15 per cent due to inefficiency in their talent supply chains, project margins and investments in talent technology and solutions. “Given our underperformance on margins this quarter, our variable pay (including sales incentives) takes a hit,” stated the email, as reported by The Economic Times. 

Incentives for employees in the sales team were also impacted, the report added. 

Wipro, however, stated that there will be no change in the salary increase and the increment will be effective from September 1. The company told the daily that the first cycle of quarterly progressions effective July 1 has also been completed. 

Meanwhile, Wipro’s attrition rates are lower than its peers with 23.3 per cent in the April-June period, but its operating margin was the lowest compared to Tata Consultancy Services, Infosys and HCL Technologies.

The quarterly variable pay was due in July. Wipro’s A and B band employees will get their reduced payout in August. 

The report, quoting the company’s management, stated that its acquisitions affected the margins by 20 basis points, 40 basis points from travel and variable costs and 1.3 percentage points from talent costs.

Also read: Infosys’ attrition highest among top 3 IT majors, Wipro improves in Q1