Wipro rolls out 90% variable pay for Q4 FY25, surpassing TCS and Infosys

Wipro has recently disbursed an average of 90% variable pay to the majority of its employees for the Q4FY25. For Q4 FY25. Wipro's current variable pay trajectory isn't an anomaly but rather a continuation of a policy that dynamically adjusts to both company and market performance. In the immediate preceding quarters of FY24, Wipro had rolled out an average variable payout of 80% for Q1 and 81% for Q2, rising to over 85% for Q3. The company's internal communication links variable pay to three key factors: revenue (40%), gross margin (30%), and total contract value (30%).

Wipro reported a consolidated net profit of ₹3,569.60 crore, marking a healthy 25.93% year-on-year increase from ₹2,834.60 crore in the corresponding quarter of FY24. Revenue from operations also saw a modest uptick, growing 1.33% to ₹22,504.20 crore. The company's IT Services operating margin remained stable at 17.5%, which is flat QoQ and an expansion of 1.1% YoY, a testament to disciplined execution and strategic cost optimisation.

Notably, Wipro secured two mega deal wins in the quarter, signaling improved client engagement and a focus on high-value consulting-led transformation programs, particularly in AI-driven solutions and engineering services.

While these numbers indicate a stable performance, the broader industry narrative has been one of subdued growth and prudence. In this context, Wipro's 90% variable payout for Q4 FY25 for employees in junior to mid-level roles (Bands A to B3) stands out. For the full financial year (FY25), the average variable payout for Wipro employees was an impressive 95%, disbursed along with May salaries.

Industry Snapshot: A tale of varied approaches

Wipro’s variable pay decision gains further context when compared to its peers in the Indian IT service sector. For the same Q4FY25 period, Infosys offered a significantly lower average variable payout of approximately 65%. This was explicitly attributed to a "subdued market climate" and a more conservative approach in a challenging business environment. Infosys had offered 80% in Q3 FY25 and 90% in Q2 FY25, indicating a downward trend in line with market conditions.

Here, TCS also adopted a differentiated approach. It awarded 100% variable pay to over 70% of its workforce for the January-March 2025 quarter. However, for the senior staff and those in business units with weaker performance, payouts were reportedly as low as 20 – 40 %.  TCS also linked variable pay to an attendance-based policy and postponed annual salary hikes, signalling a focus on cost control and performance-linked differentiation.

What we can observe from these comparisons is that while the overall industry faces similar macroeconomic headwinds, individual companies are adopting varied strategies for employee compensation.

Historically, Indian IT companies have used variable pay as a crucial tool for performance management and cost flexibility. In periods of robust growth, 100% or even higher payouts were common. Conversely, during economic slowdowns or periods of internal restructuring, variable pay often became the first lever to pull, with payouts sometimes dropping to as low as 60 – 70% across the industry, as seen in past downturns.