IT major Wipro is likely to skip giving hikes to top performers who are in the higher salary bracket in the salary revision process, which may take place in December.
The company will prioritise employees with lower compensation among those eligible for a raise. The development comes at a time when IT companies are looking at protecting their margins by controlling their wage bill.
“We are doing a selective MSI (merit salary increases) rollout based on our business affordability. This approach is based on prevailing market practices and echoes our industry peer companies, where increments have been either cancelled, muted or provided with selective coverage of employees,” Nagendra Bandaru, managing partner and president of the enterprise future business line informed employees in an e-mail.
He added that the the global economy is uncertain, and there is degrowth across the IT services industry, with customers being cautious with their IT budgets.
During the July-September quarter, Wipro had missed Street estimates on the consolidated net profit as well as the revenue front. Its net profit was down 7.5% sequentially at Rs 2,667 crore, while consolidated revenue was 1.4% lower at Rs 22,516 crore. The company’s growth was the weakest among its peers during the quarter.
The decline in revenue was primarily due to the continued weakness in the banking, financial services, and insurance (BFSI) vertical, as well as the company’s high exposure to consulting at a time when discretionary spending has plummeted.
For the October-December quarter, Wipro expects a revenue decline ranging from -3.5% to -1.5% in constant currency basis.
In July, Wipro and HCLTech had deferred salary hikes for their employees from the second to the third quarter. HCLTech had then said that it will skip compensation for senior employees this financial year.
Usually, IT firms like Wipro and HCLTech give salary hikes during the second quarter of the fiscal.
In October, US-based IT major, Accenture, which also reported a below estimate earnings, had said that it will not be paying out hikes to its employees in India and Sri Lanka this year, except in few critical skill areas and where it is legally mandated.
The company had informed its employees that it experienced a macro environment that was more challenging than anticipated at the beginning of the FY23, and growth was lower than planned. It had added that as a result the firm needed to make some hard decisions around promotions and rewards.