Infosys, India’s second-largest Information Technology (IT) services company, has postponed its annual salary hikes to the fourth quarter of FY25, deviating from its usual practice of implementing increments earlier in the year, as stated in a report by News18.
The last salary revision occurred in November 2023. The delay underscores the challenges posed by a volatile global market, particularly in the discretionary IT services segment.
Amid weakened client budgets, cautious discretionary spending, and persistent macroeconomic headwinds, other major IT players like HCLTech, LTIMindtree, and L&T Technology Services have also deferred pay hikes during Q2 to prioritise profitability and cost control.
Infosys Chief Financial Officer Jayesh Sanghrajka stated that pay hikes would be implemented in a staggered manner, with some increments starting in January and the rest rolling out in April 2025.
In the second quarter, Infosys reported a 2.2% sequential increase in net profit, amounting to Rs 6,506 crore, which fell short of market expectations. However, the company improved its margins by 10 basis points, aided by lower onsite costs, better resource utilization, and operational efficiencies.
Analysts at Motilal Oswal Financial Services caution that margins may face pressure in the December quarter due to seasonal furloughs and fewer working days. However, potential erosion could be offset by factors such as improved pricing, subcontractor expense optimisation, and Infosys’ cost-efficiency programme, Project Maximus.
Project Maximus, designed to enhance operational profitability, has become central to Infosys’ margin management strategy.
From an employee perspective, the current stagnant job market has tempered concerns about attrition due to deferred pay hikes. Selective increments are being offered to high-performing employees in specialised fields, such as artificial intelligence (AI), to retain critical talent.
In the current economic climate, many view job security as a significant advantage, despite the delay in salary increments.
