HCLTech has decided not to pay any salary increments to its senior employees this year, said chief financial officer Prateek Aggarwal.
Senior management
It is skipping compensation review which would facilitate salary hikes of senior management level employees for the fiscal year 2024.
Aggarwal says that the E4+ layer comprises the senior most staff which also forms a significant portion of the company’s wage bill.
Junior and mid senior level
Junior and mid senior level employees will be awarded with appraisals but the disbursal will be deferred by a quarter.
CEO and MD, C Vijayakumar said, “This year, we have made a decision to skip the compensation review, starting with the management layer, which is E4+, and also defer for junior to mid-level people by a quarter, which is E3 and below levels.”
Junior to mid-level
Regarding junior to mid-level staff, Chief People Officer Ramachandran Sundararajan said, “Typically, this time of the year, we make our announcements on pay reviews.
Last couple of years, the hiring that we have done and the compensation reviews that we have done, we have taken that into consideration and have taken a decision to defer our annual reviews by a quarter.”
These decisions go towards cost cutting measures the company is taking after reporting a weak June quarter performance.
A slowdown in technology spending and weak profitability are some of the reasons.
Reduction in headcount
The company saw a decline of 2,506 employees in its total headcount in Q1 which brings down its total headcount to 223,438.
“The headcount declined as we consciously didn’t hire after attrition,” Vijayakumar said.
Meanwhile it hired 1,597 freshers while attrition came down to 16.3 percent, below the 20 percent mark for the second quarter in a row.
Peers Infosys and Wipro are also delaying pay hikes.
Wipro
Wipro has deferred pay hikes till the third quarter or the December quarter, unlike last fiscal when hikes were rolled out in the September quarter.
It will also be paying out only 80 percent of the variable pay to its junior level employees in Q1.
“We did our last salary increase in September of last year, and we plan to do that for this year sometime in the third quarter,” Jatin Dalal, CFO, Wipro, said.
Infosys
Infosys has also deferred pay hikes, which is generally paid out to employee levels below the senior management in April and to the senior management in July.
The affected employees haven’t received any communication on these delays.
TCS
However TCS turned out to be an exception. It has already kick started its promotion cycle, having offered 12-15 percent hikes to its exceptional performers effective from April 1.
However it has deferred onboarding of over 200 lateral hires with two to 15 years of experience until October, citing uncertainty and delays in project commencement.
