Infosys Postpones Annual Wage Hikes To Jan-March Quarter

Companies in the IT sector have been under pressure due to muted discretionary spending, macroeconomic uncertainties, and delays in client budgets.

The delay in this process indicates the larger uncertainty in the global environment for demand, particularly for discretionary IT services. 

Source : Glassdoor

Indian IT major, Infosys, deferred its annual wage hike to the fourth quarter of the current fiscal year. The second-largest information technology services firm in the country said that it has deferredthe salary increases to the January-March quarter in the 2024-25 fiscal year (FY25).

Based out of Bengaluru, the company last implemented a salary hike in November 2023, reported Moneycontrol. Notably, increases in the wages are generally implemented earlier in the year. The delay in this process indicates the larger uncertainty in the global environment for demand, particularly for discretionary IT services. 

Companies in the IT sector have been under pressure due to muted discretionary spending, macroeconomic uncertainties, and delays in client budgets. Layoffs in the tech industry have also been rampant and impacted the job security in the sector globally. 

Not only Infosys, major players in the industry such as L&T Tech Services, LTIMindtree, and HCL Tech also skipped on giving out salary hikes to their employees in the second quarter in an effort to rein in costs and maintain profitability.

Earlier on October 17, 2024, the firm said that it was ‘planning’ wage increases in Q4 in a phased manner. Addressing a press conference post the results of the July-September quarter in the fiscal, Jayesh Sanghrajka, chief financial officer, said, “Some part of that will be effective in January and the balance will be effective in April.”

Notably, in the second quarter, Infosys reported a 2.2 per cent jump in its net profit to Rs 6,506 crore, on a sequential basis. The margins of the IT firm improved by 10 basis points and this was largely due to the reduced onsite costs, better utilisation rates, and improvement in operational efficiencies.