Narayana Murthy’s Infosys to delay salary hikes? Know what reports say

the second-biggest provider of IT services in India, Infosys, has chosen to postpone its yearly pay increases till the fourth quarter of FY25. This decision was made in response to persistent difficulties in the global demand climate, since the most recent set of pay increases was put into effect in November 2023. Due in significant part to the worldwide uncertainties surrounding the need for IT services, this change deviates from the company's custom of prior raises. Employees of Infosys may be disappointed by this, considering the company last raised salaries in November 2023.  

Some staff will begin earning raises in January, while the remaining employees will receive theirs in April as part of the company's phased rollout. During the company's Q2 results announcement, Jayesh Sanghrajka, the Chief Financial Officer of Infosys, affirmed the staged approach.

Although the precise cause of the delay is now unknown, the action raises the possibility that the IT industry is dealing with certain difficulties. These include persistent macroeconomic pressures, delayed client budgets, and low discretionary expenditure. Other IT firms like HCLTech, LTIMindtree, and L&T Tech Services have also skipped salary hikes recently in efforts to manage costs and maintain profitability.

Infosys failed to meet market expectations even though it recorded a 2.2 percent increase in net profit to Rs 6,506 crore in the second quarter. MoneyControl stated that cost-cutting measures like lower onsite expenses and higher utilisation rates caused the company's margins to modestly increase by 10 basis points.

Reports indicate that furloughs and fewer working days may put strain on Infosys' profitability during the December quarter. However, pricing increases, subcontractor cost optimisation, and the company's margin improvement plan, called Project Maximus, may help offset the effect.

It is important to remember that Infosys has already modified the dates of its pay increases. By November 2023, the corporation had already changed its policy of revising salaries each April, focussing mostly on experienced workers and leaving entry-level workers out.