Infosys revenue growth was impressive in the first quarter, but the successive quarterly margin drops are becoming a concern for the company.

It fell to 20.5 per cent in the last quarter, below its targeted 21-23 per cent for the year, and much below the 24-25 per cent that it was at just a few years ago. The company is taking a number of measures to contain the fall, many of them costcutting ones.

Salary hikes to senior employees (job level 7 — or delivery managers — and above) have been postponed.

Title holders — associate VPs, SVPs and EVPs, of which there are 971 — have not been given their annual bonus of $25,000-35,000. Travel is being discouraged, unless it is essential.

“Earlier, we just needed to inform the manager that we would be traveling.

Now it requires a sanction at a very senior level.

Video conferencing is being encouraged,” a senior executive said. There is more focus on increasing employee utilisation than on hiring, the executive said.

That is reflecting in the steady increase in utilisation levels, and the net employee addition, which was just over 900 in the last quarter, compared to the over 12,000 of TCS’s. The company is also said to be applying for fewer L-1 visas.

The L-1 visa is a non-immigrant US visa enabling employers to offer intra-company transfer of employees with specialised knowledge from one of its affiliated foreign offices to one of its offices in the US.

The company said at its earnings announcement last week that visa costs had been rising. There was anxiety among employees at the job level 7 band and above about their half-yearly variable pay.

The company, contrary to normal practice, did not announce the variable pay on the day of the earnings announcement.

When TOI contacted Infosys about it, the company said it’s on schedule. “Variable pay for employees continues to be paid in line with what has been done in previous years.

Similarly, for senior executives, the payout has always been done on a six-monthly basis, and for junior to mid-level employees it is done on a quarterly basis.

There is no change in the performance or payout cycle,” Infosys said. But an employee, who did not want to be named, said there are times when they are paid almost 60 days after the variable pay period.

Whether that will happen this time remains to be seen.

Infosys said in a statement it is committed to driving operational efficiencies as part of its normal business and continue to take measures to strengthen its operating model. James Friedman of Susquehanna Financial Group (SFG) said the best way to manage margins would be to raise prices.

But generally, companies can’t, at least on most services.

“There is too much supply and commoditisation, especially on legacy.

An alternative is to break linearity, and I think Infosys is trying to do that with more machine learning,” he said.