Wipro announced a pay hike from September 1, Chief Executive Officer Srinivas Pallia said while addressing the media after declaring results for the first quarter ended September 30, 2024. Even after the hikes, the company was able to increase its operating margin in the September quarter.
“We implemented merit salary increase effective September 1, just nine months after the last cycle,” Pallia said.
Most information technology (IT) companies have deferred salary increments to the third quarter to maintain their operating margins amid a tepid demand environment. While TCS rolled out hikes in Q2, HCLTech said it will implement a 7 percent salary hike from October, with top performers set to receive raises of up to 12-15 percent.
Infosys, on the other hand, announced that it will implement salary hikes in two phases, with junior employees receiving increments in January and the rest in April.
Wipro Chief Financial Officer Aparna Iyer added that a unique business cycle in 2023 caused delays in salary increments, but the September rollout will establish a normal hike cycle going forward. In 2023, IT companies deferred salary hikes as macroeconomic uncertainties led to a tepid demand environment.
Iyer added that the company’s operating margin for the quarter stood at 16.8 percent, which is a sequential increase of 35 basis points. “This expansion in margins was achieved through operational improvements, even after absorbing one month of salary increases for our associates rolled out in September,” she said.
Fresher Hiring, Backlogs
Saurabh Govil, Wipro's chief human resources officer, provided updates on fresher hiring. He said that the company has been consistently onboarding between 2,500 and 3,000 freshers every quarter since Q1 of this fiscal year.
In July, Wipro said it plans to hire 10,000 to 12,000 people, including on and off campus, for the financial year 2025.
When asked about fresher backlog, he assured that it would be cleared by the end of Q3.
Several IT companies, including Wipro, delayed the onboarding of freshers in 2022 and 2023 following a revenue decline caused by reduced discretionary spending in their key markets, the US and Europe, amid macroeconomic uncertainties.
The Bengaluru-based company added 978 employees in Q2, signalling that the company is pacing itself for growth. This comes at a time when Wipro is reassessing its lateral and campus hiring models to focus on improving utilisation rate of existing employees amidst lowering attrition, to grow margins.
Wipro corrected its Q1 headcount on October 17, attributing the discrepancy to an error from one of its entities. Total headcount for the quarter stood at 233,889, which is 10,818 fewer employees year-on-year from Q2FY24 when the headcount was 244,707.
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