Infosys, India's second-largest IT services company, has postponed the salary hikes that are typically implemented from April for employees below the senior management level, reported Moneycontrol. This decision serves as another indication of the challenges companies are facing in the current macroeconomic climate, with projects being scaled down or cancelled.
According to multiple well-informed employees, there has been a lack of pay raises that were traditionally given in the June quarter (Q1). Furthermore, these employees have not received any notification regarding the delay or any information regarding when they can expect to receive their pay increases.
Similarly, the company typically implements salary hikes for its senior management in July. However, up until now, there has been no communication regarding these raises. At the time of publishing, it remains uncertain whether the hikes for senior management have also been deferred.
In 2020, during the pandemic, Infosys had frozen hikes as a measure to conserve cash, but later implemented them in January 2021. Despite reaching out to the company for inquiries, no response has been received at the time of publishing. This story will be revised accordingly if a response is received from the company.
On July 20, Infosys is scheduled to release its financial results for the first quarter of the fiscal year. It is anticipated that the quarter's performance will be modest. For the entire fiscal year, the IT major has provided guidance for revenue growth ranging from 4-7 per cent in FY24. This marks the first time since FY18 that the company's revenue falls within this projected range.
During the fourth quarter of FY23, the company implemented an average reduction in variable payout to 60 per cent across the entire organisation. However, it is important to note that an employee's final variable payout will be determined by the specific guidelines of their unit or department. The actual payout may differ based on factors such as pay grades and individual departments.
In an email sent to employees, it was mentioned that the fourth quarter was influenced by market volatility and unforeseen events. The email emphasised the importance of staying vigilant amidst these changes, viewing them as opportunities for collective rallying and maintaining dedication to navigate the evolving business landscape.
“As we remain vigilant to the changes in the market, we must also see this as an opportunity to rally as a group and remain committed to navigating the changing business landscape,” the email sent to employees at the time read.
"While FY23 was a year of strong performance overall, the quarter that went by was impacted by a volatile market and unforeseen events,” an email sent to employees, as seen by Moneycontrol, said.
During the Annual General Meeting held last month, Chief Executive Officer Salil Parekh acknowledged that the overall demand environment has undergone a transformation.
“What we've seen over the last four quarters, Q4 and before, attrition has steadily been coming down each quarter on a quarterly basis. We see a lot of the initiatives that we've put in place, and also the overall economic environment, both of them relating to the attrition coming down, our employee engagement scores are continuing to go up and we believe that with that we will have a good control on attrition in the coming quarters,” he added.