Infosys to raise salaries of Indian employees by 6%

In a move that will bring respite to its employees, IT major Infosys today said it will increase salaries for its staff in India by about six percent.

"We have taken a decision to give compensation increase average of six percent offshore and 2-3 per cent average onsite. This will come effective October 1 for offshore and January 1 for onshore," Infosys CEO and MD S D Shibulal told reporters here.

Infosys was the only company among the large software services firms, which had not hiked salaries so far. It had cited the uncertain business environment for the decision and had said it will take a call on the same in October.

In 2009 too, Infosys had deferred hikes and gave it out in the middle of the year when the business sentiment improved. This time, however, Infosys did give promotions to 20,000 employees earlier this year.

When asked about the impact of the wage hike on margins, the company said in July, it had said its operating margins could decline by 200 basis points for the full year. "We are maintaining that... We are using levers on the cost side to offset it (wage hike)," Infosys CFO and member of the Board V Balakrishnan said.

During the quarter, Infosys and its subsidiaries added 10,420 (gross) employees, while the net addition stood at 2,610 people. Its total headcount stood at 1,53,761 as on September 30, 2012.

Infosys BPO, which accounted for USD 111.03 million in revenues during the quarter, saw headcount increasing to 22,918 employees from 19,765 people in the July-September 2011 period.

For the year ending March 31, 2013, Infosys has said it expects to hire 35,000 people, including 13,000 people for the BPO operations.

Infosys that reported its quarterly results today for the July-September 2012 period saw net profit rising 24.29 percent to Rs 2,369 crore, while revenues grew Rs 9,858 crore. Infosys said its attrition has decreased year-on-year from 15.6 percent in the April-June 2012 quarter to 15 percent in the reporting quarter.

The company has also improved the utilisation rate (including trainees) to 69.6 percent, compared with 67.2 percent in the April-June 2012 quarter. However, on a year-on-year basis, utilisation rates are slightly lower than the 70.2 per cent registered in the July-September 2011 quarter.

The IT major also said Balakrishnan has stepped down from his post as the CFO. Rajiv Bansal, who is currently serving as the Vice-President (Finance) will take over as the new CFO from November.

Balakrishnan will, however, continue to be on the board of Infosys and will be responsible for three key businesses -- Infosys BPO, Finacle and the India Business Unit.