Sneh Ticku, Pune
Bangalore, India – In a move highlighting the challenging macroeconomic climate faced by companies, Infosys, India’s second-largest IT services company, has reportedly deferred salary hikes for its employees below the senior management level. The usual practice of rolling out pay increases from April has been put on hold, leaving employees needing more certainty about their future compensation. The decision comes as projects are being ramped down or cancelled, adding to the stress companies are experiencing.
Numerous employees, speaking on the condition of anonymity, confirmed that they have yet to receive their anticipated pay raises for the June quarter (Q1). Additionally, there needs to be more communication regarding the delay or any information about when the salary hikes will be implemented. Even the senior management, who typically receive their hikes in July, have yet to receive any notification about their salary revisions. It remains to be seen whether their pay increases have also been deferred.
Infosys has taken such a measure before. In the pandemic year of 2020, the company froze salary hikes as part of cash conservation efforts. However, pay raises were eventually granted in January 2021.
When contacted for comment, Infosys did not respond to the queries at the time of publishing. Any response from the company will be promptly updated in this report.
Infosys is scheduled to announce its financial results for the first quarter of the fiscal year on July 20. The quarter is expected to be subdued, reflecting the challenging market conditions. For the entire fiscal year, Infosys has projected a revenue growth rate of 4-7 percent in FY24. This range represents the first time since FY18 that the company’s revenue will fall within the guided range.
During the fourth quarter of FY23, Infosys reduced its variable payout on average by 60 percent across the organization. However, the final variable payout for each employee depends on specific unit or department guidelines, with variations based on pay grades and departments.
An email sent to employees during that period cited a volatile market and unforeseen events as reasons for the fourth-quarter impact. The email urged employees to stay committed to navigating the changing business landscape while remaining vigilant about market changes.
In the company’s Annual General Meeting held last month, Chief Executive Officer Salil Parekh acknowledged the changing demand environment. He expressed optimism about the company’s initiatives and the improving economic environment, which he believed would help control attrition in the coming quarters. Parekh highlighted the declining attrition rates and increasing employee engagement scores as positive indicators for the company’s future stability.
As the situation unfolds, Infosys employees eagerly await further updates on their postponed salary hikes, hoping for positive news amidst the uncertain economic climate.