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Amid Layoffs and Pay Cuts, HCL Announces Variable Pay To 85% of Its Employees

Amid Layoffs and Pay Cuts, HCL Announces Variable Pay To 85% of Its Employees

HCLTech would award 85 percent of its employee’s variable pay for Q4 FY 2022-23. In the same manner, as in previous quarters, 85% of the company’s employees will receive variable pay for Q4 FY23, the company announced this development on its earnings call.

During the quarterly earnings call, HCLTech’s Chief People Officer (CPO) Ram Sundarajan addressed the much-asked question and said, “Let us start with the variable pay question. I think it’s a very top-of-the-mind question for everybody. We are not making any changes to our variable pay plans. 85% of our workforce will be in a variable pay plan this quarter.”

“Variable pay is just about 5%, so it’s not a big percentage of employee compensation. So far as the policy is concerned the variable policy pay, there is no change in the policy,” he added.

Depending on the company’s performance and the performance of individual employees, variable pay is an important part of employee compensation.

As of Thursday, corporate profits rose 10.80 percent year-on-year (YoY) at Rs 3,983 crore, compared to Rs 3,593 crore in the March quarter last year. In addition, the company reported 17.70 percent YoY growth in net sales for the quarter at Rs 26,060 crores against Rs 22,597 crores last year.

Prateek Aggarwal, Chief Financial Officer, HCLTech, after the earnings announcement, said, “FY’23 concluded with resounding growth of 18.5 percent in INR and 13.7% in CC, with EBIT at 18.2%. This quarter, we have started publishing a new metric, Annual Recurring Revenue (ARR) for our Software business. It is heartening to note that ARR is at US$ 1Bn+ level, which grew at 5.2% YoY CC (ex. divested business).”

Despite the company’s decent number, it warned that the guidance for the next financial year would be conservative. Profit After Tax (PAT) for the company was 14,851 crore, up 10 percent year-on-year, with Earnings Per Share (EPS) at Rs 54.79.

HCLTech’s CEO, C Vijaykumar said, “Our pipeline is near an all-time high, which reflects our differentiated business mix and strong client demand for our offerings.”

“All these set us well in FY’24 for a healthy revenue growth in the 6-8% range with Operating Margins in 18-19 per cent range,” he added.


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