News: HCL Tech announces salary freeze in 2023 – Here's who will be impacted

Compensation & Benefits

HCL Tech announces salary freeze in 2023 – Here's who will be impacted

The Chief Financial Officer of HCL Tech revealed that employees at the junior and mid-levels would continue to receive performance appraisals.
HCL Tech announces salary freeze in 2023 – Here's who will be impacted

HCL Technologies, following a disappointing first quarter, has made the decision to withhold salary increments for senior employees within the IT services company this year, as confirmed by Chief Financial Officer Prateek Aggarwal on July 13th.

In addition, the CFO of HCL Tech mentioned that junior and mid-level employees will still receive appraisals. However, the disbursal process for these appraisals will be delayed by one quarter, reported CNBC. 

In order to achieve the targets set by the company, additional actions are being undertaken beyond these announced measures to generate the necessary cost savings. This decision is a result of the IT giant's focus on implementing cost-cutting measures following lackluster June-quarter earnings, attributed to a slowdown in technology spending and reduced profitability.

As per the guidance for FY24, the company anticipates a year-on-year revenue growth rate of six to eight percent in constant currency. Furthermore, the constant currency services revenue growth is projected to fall within the range of 6.5 to 8.5 per cent. The EBIT margin guidance remains unchanged at 18 to 19 per cent.

For the first quarter ending on June 30, 2023, HCL Tech recorded a consolidated net profit of Rs 3,534 crore, reflecting a year-on-year increase of 7.6 per cent. However, this figure fell short of the estimated Rs 3,809 crore as per the CNBC-TV18 poll. 

Sequentially, the company's net profit experienced a decline of 11 per cent in the first quarter of the fiscal year, dropping from Rs 3,983 crore in the previous quarter.

The Noida-based company's revenue from operations amounted to Rs 26,296 crore, marking an increase of nearly 12 per cent compared to the corresponding period of the previous year.

During the quarter, HCL Tech experienced a net reduction of over 2,500 employees, resulting in a total headcount of 223,438. However, the company also onboarded 1,597 freshers during this period. Notably, attrition further decreased to 16.3 per cent, remaining below the 20 per cent threshold for the second consecutive quarter

"The headcount declined as we consciously didn't hire after attrition," C Vijayakumar, CEO and Managing Director, HCL Tech said on July 12 after announcing the results.

Contrastingly, in the January to March 2023 period, the IT services firm witnessed a net increase of 3,674 employees. During that quarter, the company had successfully onboarded 4,480 freshers.

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Topics: Compensation & Benefits, Business, #HRTech, #HRCommunity

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