One of the biggest IT companies in the country, Wipro, has decided to hold back variable pay for its mid and senior-level employees while fresher and junior-level staff will get variable pay after 30 per cent cut. In an email, the company said that the variable pay cut is happening due to operating margin pressure.
It is said that Wipro sent an email to its C band and senior employees stating that they would not receive any variable payouts. The email, though, mentioned that employees in A and B bands would receive 70 per cent of the target payout. And these employees will get their pay cut by the end of August.
The company said that the decision to hold back variable pay comes after teams failed to achieve their assigned target. The email stated that the Q1 margins were lower at 15 per cent due to inefficiency in 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,” Wipro noted in the email to employees, accessed by The Economic Times.
Stating the same reason, the company said that the incentives for employees in the sales team have also been impacted.
In the same email, the IT company also stated that there will be no change in the salary hike and the increment will be effective from September 1. As per a report coming from The Times of India, Wipro said that “hikes for our employees will be effective from September 1. We have also completed the first cycle of quarterly progressions effective July 1.”
Tech companies in general are going through a tough time. Big tech firms like Google and Apple are planning layoffs. While Google is warning employees to work harder, Apple has already laid off 100 employees. Some of the other big tech companies like Netflix, Microsoft, and more have also fired hundreds of employees as a result of economic downtime.