Top employees at the country’s fourth-largest information technology (IT) services company will get an average pay hike of about 8%, two company officials told Mint on condition of anonymity, which would make this year’s pay hike higher than the average of about 6% last year.
According to the first of the two officials cited earlier, Wipro has a total of 200,000 offshore employees, of which about three-quarters work outside client locations and are likely to get a pay hike of nearly 8%, while those working at client locations are likely to get a 3% hike.
“We are pleased to inform you that our Merit-Based Pay Increase (MSI) cycle will be effective from September 1, 2024, less than 12 months after the last MSI,” Wipro chief human resources officer Saurabh Govil wrote in an internal email to employees on August 29. Mint.
Wipro usually gives salary hikes between September and October but last year it postponed the hike and will start from December 2023.
“The HR partner will share detailed eligibility guidelines and process with your manager soon,” Govil wrote in an email to employees. “The revised compensation will be reflected in the October payroll and September back pay.”
Tech sector slowdown
Wipro became the second large Indian software company after Tata Consultancy Services Ltd (TCS) to announce a pay hike, allaying concerns that the pay hikes could be delayed due to the global tech slowdown.
An email sent to Wipro remained unanswered till press time.
TCS is offering double-digit salary hikes for high-performing employees and an average 4.5-7% salary hike for other employees, effective April 1, 2024.
India’s $254 billion IT industry grew at an all-time low of 3.8% last year as macroeconomic uncertainty led clients to cut technology spending.
In the year ending March 2024, the average remuneration of Wipro employees (excluding whole-time directors) increased by 9.43% compared to the previous year.
To be sure, the pay raises are not uniform across teams.
The second official said rate hikes this year could exceed 8% and would certainly be higher than last year.
expect
“We expect the rate hike to be more than 8% this time. While we are not sure of the exact number, we are sure that the rate hike will be higher than last year. However, we have to wait and watch the upcoming rate hike letter which will detail the rate hike numbers,” the official said.
Although experts do not expect the situation to improve immediately, people remain optimistic.
“Enterprise customers remain focused on cost optimization, which continues to drive most of the technology spending, but some stalled projects have resumed. Prices are expected to remain stable with slight increases (a positive sign). Enterprises are starting to commit to net new spend on pocket change,” HDFC Securities analysts said in a 13 September note.
While Wipro and TCS have announced salary hikes, uncertainty remains at Noida-based HCL Tech and Bengaluru-based Infosys Ltd, with both companies yet to decide on the salary hike schedule for this year.
“IT services companies are uncertain about the macroeconomic situation. They are waiting for a clearer picture on their growth prospects before deciding on the magnitude and timing of rate hikes,” said Pareekh Jain, CEO and chief analyst at EIIRTrend.
Wipro Spending ₹The company’s staff costs for the fiscal year ending March 2024 were $6.6 billion, accounting for 61% of the company’s full-year revenue of $10.8 billion.
The salary hike comes as Wipro prepares to recruit employees from campuses after a year-long hiatus. The company expects to increase its new employee recruitment target to 10,000 from 10,000 in the fiscal year ending March 2025.
Less than six months ago, Wipro underwent a leadership change with Srinivas Pallia taking over as the company’s CEO on April 6, 2024, replacing Frenchman Thierry Delaporte.
“The next few months will be critical as we lead the company toward growth. As an avid hiker, I was deeply moved by these words of Junko Tabei, the first woman to climb Mount Everest. She said, ‘Even if it’s hard, just climb step by step and you will reach the summit. Of course, I seek the trust and continued support of all of you, our customers, our colleagues, partners and the media as we move forward,” Paglia said during his first post-earnings interaction as CEO on April 19, 2024.
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