The announcement that TCS, Infosys, and Wipro would be cutting variable compensation and will have a slower rate of recruiting in FY23 is a reflection of the continued issues that the Indian information technology sector is facing. These problems consist of escalating expenses, increased competition from new competitors, and the effect that the COVID-19 epidemic is having on the economy of the whole world. Variable pay, a portion of an employee's income contingent on performance, is often employed as a cost-saving tool by businesses when times are tight. This is because variable pay rewards employees for exceeding expectations. While this may assist in saving expenses in the near term, it may have a detrimental effect on staff morale as well as retention rates. A high rate of staff turnover has caused expenses to rise, such as increasing salaries and the payment of a premium for the skills needed to fill open positions in all IT subfields. And as a result, operational margins have been under pressure throughout the most recent quarter.