Infosys, India’s second-largest IT services company, has announced the deferral of its annual salary hikes to the fourth quarter of the current financial year (Q4FY25).
This decision comes amidst ongoing challenges in the global market, particularly in discretionary IT services.
The company’s Chief Financial Officer, Jayesh Sanghrajka, revealed that while some increments will take effect in January, the remainder will be rolled out in April 2025.
Infosys Salary Hike Postponed: Background and Context
The decision to defer salary hikes is a response to the current economic environment, characterized by weakened client budgets, cautious discretionary spending, and persistent macroeconomic headwinds.
Infosys had previously implemented salary revisions in November 2023, but the delay in this year’s increments highlights the ongoing volatility in the global market.
Despite the deferral of salary hikes, Infosys reported a 2.2% sequential increase in net profit for the second quarter, amounting to Rs 6,506 crore.
The company managed to improve its margins by 10 basis points, supported by lower onsite costs, better resource utilization, and enhanced operational efficiency.
These measures have been part of Infosys’ broader strategy to maintain profitability and control costs in a challenging economic climate.
Industry-Wide Impact
Infosys is not alone in its decision to defer salary hikes. Other major IT players, including HCLTech, LTIMindtree, and L&T Technology Services, have also opted to delay pay raises during the second quarter to manage costs and sustain profitability.
This industry-wide trend reflects the broader uncertainty in global demand, particularly for discretionary IT services.
From an employee perspective, the current stagnant job market appears to have reduced concerns about heightened attrition due to deferred pay increases.
Selective increments continue to be offered by certain delivery teams to high-performing employees, particularly in specialized fields such as artificial intelligence, where retaining top talent remains crucial.
In today’s uncertain economic environment, many employees view holding on to a job as a significant advantage.
Infosys Project Maximus and Cost Efficiency
Infosys has been implementing its cost-efficiency initiative, Project Maximus, which aims to enhance operational profitability.
This project has become a key part of Infosys’ margin management strategy, helping to mitigate potential margin erosion due to seasonal furloughs and reduced working days.
Analysts from Motilal Oswal Financial Services predict that while Infosys’ margins may face pressure in the December quarter, factors such as improved pricing, optimization of subcontractor expenses, and Project Maximus could help offset this pressure.
Note: We are also on WhatsApp, LinkedIn, Google News, and YouTube. To get the latest news updates, subscribe to our channels. WhatsApp: Click Here, Google News: Click Here, YouTube: Click Here, and LinkedIn: Click Here.
