With global trade tariffs derailing discretionary demand in the IT sector, Wipro has said it will take a call on employee wage hikes for FY26 closer to the actual date. The announcement follows a similar move by industry leader TCS, which also deferred salary revisions this year citing the uncertain business climate.
Decision Deferred Amid Global Headwinds
“We are still very far from that time, and in this uncertain environment, we will decide closer to the date,” said Saurabh Govil, Chief Human Resource Officer at Wipro, after releasing the company’s Q4 FY25 results. He added that Wipro had already implemented early wage hikes in September 2024—just nine months after a previous hike in December 2023.
The company’s approach signals growing caution across the IT industry, where subdued demand and economic headwinds have forced firms to reassess cost structures and spending plans.
Tariffs Fuel Macroeconomic Concerns
Wipro’s leadership flagged significant uncertainty stemming from geopolitical developments, particularly trade tariffs enforced by the US. CEO Srinivas Pallia pointed out that tariffs imposed by the Trump administration have increased risks for the sector heading into FY26.
“I don’t have a crystal ball that tells me how it goes… but the uncertainties from FY25 to FY26 have dramatically increased,” Pallia said, addressing the media post-results.
He warned that trade tensions between the US, China, and Europe could affect key clients, especially European businesses heavily reliant on global trade. “With that in context, we have looked at all the uncertainties… clients, and based on that we have given our guidance,” he noted.
Sector-Wide Impact
The cautious approach from Wipro mirrors a broader sentiment across India’s IT industry. Discretionary IT spending, a key revenue driver for tech companies, is likely to face constraints as clients delay or reduce investments due to economic concerns.
With multiple headwinds on the horizon—ranging from recession fears in the US to strained trade ties in Europe—IT firms are prioritizing operational flexibility over fixed commitments like early wage hikes.
Wipro remains watchful of evolving global dynamics as it plans for the next financial year.
