IT major Infosys has decided to decrease the average variable payout of employees to 70% because of falling operating margins in the first quarter of FY23. The company reported that the margin impact in the quarter had been reflected in the performance bonus for this cycle.

Infosys reported its operating margin in Q1FY23 at 20.1%. The overall expenses had jumped more than 29%, primarily due to higher retention costs and cross-currency headwinds. The company had reported attrition levels at 28.4%, while it had increased its employee headcount by 21,000.

Variable pay is the incentive provided to employees by their companies based on performance. Companies usually choose various ways to give variable pay, though not all forms are monetary. Before Infosys, Tata Consultancy Services and Wipro also reduced variable payouts for the April-June quarter as margins came under pressure.

This move, however, has been condemned by the IT employees’ union Nascent Information Technology Employees Senate (NITES). It asserted that the net profit for the last quarter was at Rs 5,360 crore, compared with Rs 5,195 crore in the same period a year ago. Revenue or turnover increased 23.6% to Rs 34,470 crore in April-June quarter of FY23. With such financial results, the company deducts 30% of variable pay. This is clear exploitation of IT employees.

Founded in 1981, Infosys provides business consulting, information technology and outsourcing services. Headquartered in Bengaluru, it has become India’s second-largest information technology (IT) firm over the years.