Infosys, bellwether of India’s IT sector, has decided to defer the salary hike for its employees, a Money Control report says. The report says usually, the salary hike is communicated to all staff below senior management by June. But this year, the staff haven’t received any kind of communication. The report says that the decision shows that the IT sector is facing tough conditions due to present macroeconomics conditions. This is the first time since 2020 that Infosys has deferred the salary hike. At that time, the IT giant had frozen the raise. A year later in 2021, the pay hikes were rolled out, the report further added.
It should be noted that the last quarter of FY22-23 also witnessed poor performance by the top IT players. The likes of Wipro and TCS had suffered a dent in the earnings in the April quarter. In FY23 fourth quarter, Infosys had also reduced the variable component of salary of almost 60 per cent of the workforce.
After Infosys slashed Q4 variable, many expressed concerns over health of tech sector. Aditya Mishra, MD and CEO of CIEL HR, told FE earlier that though IT firms were posting positive outlook with a promising note that things would improve in October and November, things are not in pink exactly. Mishra added that at current pace, situation would improve in ‘early 2024.’
Meanwhile, Tata Consultancy Services is set to announce the earnings of Q1 of FY24 today. Latest reports say that TCS is also likely to declare the dividend apart from the Q1 numbers. Like Infosys, TCS has also seen postponements and cancellation of some projects due to demand uncertainty. Latest reports say that the industry experts believe that TCS will announce weak numbers. One of the key indicator that everyone will focus on will be attrition rate. Possible share buyback will also be watched out.