IT firms to cut payouts as outlook weakens

The information technology (IT) industry is likely to offer muted variable payouts of 60-70% of the promised amount for the June quarter, with top performers getting as much as 80%, as IT companies focus on saving costs amid a weakening revenue outlook and reduced employee turnover.

- Devina Sengupta & Mayur Bhalerao

"Considering the current sentiment, there is a possibility that employers take a prudent approach, and payouts will be made only to those teams whose businesses have performed well," said R. Ramesh, director of digital business solutions, professional staffing and international engagement at staffing firm Adecco Staffing.

Unlike IT product companies, which are seeing active hiring, IT services companies have curtailed recruitment efforts. The drop in attrition rates amid sluggish market conditions is another reason companies can skip workers' demands. Analysts expect IT services firms' June quarter earnings to be weak.