In a recent update, India’s second-largest IT services company, Infosys, has deferred the salary hikes that it typically rolls out from April for its employees below the senior management level.
Infosys Defers Pay Hikes For Employees
The development seems to be another indicator of the stress companies are going through in the current macroeconomic climate as they see projects that are ramped down or canceled.
The news was confirmed by savers employees as they have not received their pay raises that used to come in the June quarter (Q1).
It gets further complicated as they have also not received any intimation on the delay or when they are likely to receive their pay increases.
As per its usual schedule, the IT service provider rolls out hikes for its senior management in July.
Although, so far they too haven’t received any communication in this regard.
At the time of publishing this article, It could not be ascertained if their hikes too have been deferred.
Prior to this, Infosys froze hikes in the pandemic year of 2020 in order to cash conservation, and later on rolled out hikes in January 2021.
Considering the quarter expected to be subdued, Infosys is due to report its numbers for the first quarter of the fiscal on July 20.
The IT major has guided for revenue growth of 4-7 percent in FY 24 for the whole year.
Since FY18, it’s the first time when the company’s revenue will be in this guided range.
The company reduced its variable payout on average to 60 percent across the organization, during the fourth quarter of FY23.
Although, the average payout was 60 percent, an employee’s final variable payout will depend on their unit or department’s guidelines, and varies for different pay grades and departments.
IT Companies Affected By Volatile Market and Unseen Events
The fourth quarter was impacted by a volatile market and unseen events, said an email sent to employees at the time.
It further read, “As we remain vigilant to the changes in the market, we must also see this as an opportunity to rally as a group and remain committed to navigating the changing business landscape.”
Adding, “While FY23 was a year of strong performance overall, the quarter that went by was impacted by a volatile market and unforeseen events.”
During the company’s Annual General Meeting last month, Chief Executive Officer Salil Parekh said that the overall demand environment has changed.
Adding, “What we’ve seen over the last four quarters, Q4 and before, attrition has steadily been coming down each quarter on a quarterly basis. We see a lot of the initiatives that we’ve put in place, and also the overall economic environment, both of them relating to the attrition coming down, our employee engagement scores are continuing to go up and we believe that with that we will have a good control on attrition in the coming quarters.”
