Infosys Takes U-Turn on Annual Pay Hikes Despite Q2 Gains

Infosys has postponed annual salary hikes to the fourth quarter of the financial year 2024-25, according to Moneycontrol. The IT giant was reportedly considering wage increments in FY25 in a phased manner. 

Earlier, during a press conference after Q2 results in October, the chief financial officer (CFO) Jayesh Sanghrajka, had mentioned regarding the IT giant’s planned hikes in a phased manner partly in January and the remainder in April. The company last gave salary hike in November 2023. 

“Some part of that will be effective in January and the balance will be effective in April,” said Sanghrajka. 

The company’s financial health is sound. In its Q2 results, the IT giant showed a 5.11 per cent year-over-year growth coupled with a 4.73 per cent rise in profits. 

Infosys isn’t the only tech company delaying hikes. A similar path of salary hike postponement has been taken by Infosys rivals like HCLTech, LTIMindtree and L&T Technology Services to sustain profitability, according to a Moneycontrol report. According to the report, the delay is due to the pressure from weak discretionary spending, deferred client budgets and ongoing macroeconomic uncertainties. 

All this comes at the time when salaries of chief executives at the top five IT companies in India have increased over 160 per cent in the past five years, whereas the new entrants’ salary increase has hardly touched 4 per cent during the same period, Moneycontrol reported, citing sources. 

The top five companies were comprised of Infosys, HCLTech, TCS, Wipro and Tech Mahindra. The report throws light on the trend that corporate profits have failed to fuel similar wage growth in the last decade. 

The trend was called out by the chief economic advisor (CEA), V Anantha Nageswaran earlier in December last year. Although Nageswaran didn’t directly target IT companies, he did highlight that the poor compensation to employees by India Inc., will adversely affect demand and eventually end up harming the corporate sector. 

“The staff cost of private-listed companies has been coming down...not paying workers enough will end up being self-destructive or harmful for the corporate sector itself,” said Nageswaran at an Assocham event.