Pressure on margins and supply-chain challenges are amongst the reasons why Wipro has decided to hold back variable pay of its employees.
It is reported by Economic Times that while managers and other senior levels up to the C-suite will not receive any variable pay at all, the freshers and those up to the team leader level (in bands A and B) will receive 70 per cent of the total variable pay.
Inefficient investment in technology may also be a reason for this move, in addition to the issues with talent supply and lower margins during the quarter.
The employees have been informed via an e-mail about holding back the variable. They have been told that incentives of the sales personnel will also be affected, because the Company has underperformed in terms of margins this quarter.
Wipro has posted a dip of about 21 per cent year-on-year in its consolidated net profit. Apparently, the consolidated net profit has come down to Rs 2,563.6 crore for the quarter ended June 2022, while the profit for the period, during the same time last year, was about Rs 3,242.6 crore. That means, the net profit fell 20.6 per cent year-on-year.
The attrition rate at Wipro was slightly lower in this quarter compared to the previous quarter. It was 23.3 per cent in April-June, which was much lower than the 28 per cent for the quarter before that.