Infosys postpones annual salary hikes to Q4: Here's why
What's the story
India's second-largest IT services firm Infosys has delayed its annual wage hikes to the fourth quarter of the current fiscal year (Q4FY25).
The Bengaluru-based company last implemented such hikes in November 2023.
This decision is viewed as a response to global economic uncertainties and their effect on discretionary IT services demand.
Industry trend
Other IT giants also delay salary increments
Infosys isn't the only one making this move. Other industry players like HCL Technologies, LTI Mindtree, and L&T Tech Services have also deferred their salary increments in the second quarter.
These decisions are part of larger strategies to control costs and remain profitable in the face of a tough economy.
Future strategy
Infosys's phased wage hike plan
Last October, Infosys had announced its plan to implement wage hikes in a phased manner during Q4.
"Some part of that will be effective in January and the balance will be effective in April," Jayesh Sanghrajka, the company's Chief Financial Officer, said at the time.
The announcement came after the company released its Q2 results, wherein it saw a 2.2% quarter-on-quarter increase in net profit to ₹6,506 crore. However, the figures fell short of market expectations.
Market analysis
Analysts weigh in on IT job market
Analysts have indicated that the current stagnant job market is giving IT companies the confidence to delay wage hikes without the fear of employees resigning.
However, some delivery teams within these large enterprises still continue to selectively offer salary hikes to top performers, especially in fields like artificial intelligence.
This is because each unit has a budget reserved for rewarding exceptional talent.