India's second-largest software major Infosys will issue salary hike letters to its employees by the end of February, with the average increase expected to be in the range of 5% to 8%, according to people familiar with the development. The pay hikes, for the year 2024-25, will be effective from April.
The hikes come amid a pickup in the demand environment, as most IT companies expect technology budgets to rise in the next fiscal year. Indian IT companies, which derive a majority of their revenues from North America, say discretionary spend is picking up with more companies willing to invest in transformative projects after holding back for the last two years.
Request for comment to the company did not elicit response till the time of publication.
Moneycontrol learns that Infosys has also started issuing promotion letters in batches. While the first one went out in end of December, another batch will be issued at the end of February.
On January 16, the IT services giant said it will roll out 6-8 percent annual salary hikes for its employees in India, starting January 2025. This will be phase one of its planned salary revisions, with the second one beginning in April 2025.
"Broadly, the comp (annual salary increment) that we are expecting is 6-8% in India, and the overseas comps will be in line with the earlier comp reviews," Infosys’ Chief Financial Officer Jayesh Sanghrajka said while addressing the press after declaring the third quarter results ending December 31, 2024 (Q3FY25).
Infosys employs over 3.23 lakh professionals.
On January 5, Moneycontrol reported that India’s second-largest IT company had deferred annual wage hikes to the fourth quarter of the current financial year (Q4FY25). The Bengaluru-based company last implemented salary hikes in November 2023.
"Of course, high performers would receive much higher hikes, et cetera. Most employees will see their salary increases in the fourth quarter," Chief Executive Officer Salil Parekh disclosed further while speaking to analysts after declaring the Q3 results.
Many IT companies delayed salary hikes in the past couple of years, reflecting the broader uncertainty in the global demand environment, particularly for discretionary IT services. These firms faced pressure from weak discretionary spending, delayed client budgets, and macroeconomic uncertainties.
However, IT firms have started to see a turnaround in Q3, after a turbulent 18 months.
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