India’s top IT services firms are freezing or cutting staff bonuses, worried that tightening budgets at US and European clients who are bracing for a recession will sharply hit their own profits after a pandemic-led boom.

“We expect the margin erosion to persist in the medium term.… due to reversal in employee-employer bargaining power,underwhelming graduate uptake, limited price increases,return in travel costs and high onsiteinflation，"JP Morgan analysts said in a note this week.
India's Nifty IT index.NIFTY has fallen by a quarter this year,its first decline in six years and underperforming the benchmark Nifty 50 index.NSEI that is up 1.5%.
“The bottom line.. would be that they are doing this (cutting variable pay)to protect or ease pressure on margins but that also simultaneously conveys that the growth outlook is softening," said Ruchi Mukhija,Vice President, Technology and Internet,Elara Capital.