Infosys, India’s second-largest IT services company, has finally rolled out its annual salary hikes, bringing some much-needed cheer to its employees. Effective from February 24, the salary revisions range from 5% to 8%, with top performers receiving hikes of up to 10-12%, according to a Moneycontrol report citing insider sources. However, the hikes are reportedly 5-10% lower compared to the previous revision in November 2023, reflecting the ongoing slowdown in the IT industry.
Key Details of the Salary Hike
- Eligibility and Effective Dates:
- The salary hikes apply to employees in Job Levels 5 and 6 (JL5 and JL6).
- JL5 employees, which include team leaders and junior-level positions, will see their revised salaries applied retroactively from January 1, 2024.
- JL6 employees, typically managers below the vice president level, will have their pay hikes take effect from April 1, 2024.
- Performance-Based Hikes:
- Infosys evaluates employee performance across four categories: outstanding, commendable, met expectations, and needs improvement.
- Met Expectations: Employees in this category received a raise of 5-7%.
- Commendable Performance: Employees secured hikes of 7-10%.
- Outstanding Performers: The top performers enjoyed salary increases ranging from 10-20%.
- Needs Improvement: Employees in this category did not receive any raises.
- Infosys evaluates employee performance across four categories: outstanding, commendable, met expectations, and needs improvement.
- Variable Pay and Bonuses:
- The company has also reduced its variable pay or performance bonus by a similar margin of 5-10%, aligning with the broader industry trend of cost-cutting amid slowing demand.
Industry Context and Employee Sentiment
The salary hikes come at a time when the IT industry is facing significant challenges, including reduced client spending and macroeconomic uncertainties. Infosys, which employs over 3.23 lakh professionals, last revised salaries in November 2023. The current hikes, though lower than previous revisions, are a relief for employees who have been anticipating better increments.
An employee shared their disappointment with Economic Times, stating:
“On a day like this, our MS Teams communicator groups are usually buzzing with chats. The groups have gone quiet this time as they probably expected a bigger hike. We are, of course, also aware the industry is passing through a challenging phase.”
Management’s Perspective
Infosys Chief Financial Officer Jayesh Sanghrajka had previously hinted at the salary revisions during an earnings call last month. He mentioned that the company was planning a salary increase of 6-8% for employees in India, with top performers receiving significantly higher increments. For overseas employees, salary hikes were expected to remain in the low single digits.
Broader Industry Trends
The salary revisions at Infosys mirror a broader trend in the IT sector, where companies are balancing employee expectations with the need to manage costs amid a slowdown. Other IT giants, including TCS and Wipro, have also implemented similar measures, including reduced variable pay and moderated salary hikes.
What This Means for Infosys Employees
While the salary hikes are a positive development, they are lower than what employees might have hoped for, given the company’s strong market position and market capitalization of Rs. 7.32 lakh crore. The reduction in variable pay further underscores the challenges faced by the industry. However, the hikes are a testament to Infosys’ commitment to rewarding its employees, even in tough times.
Final Thoughts
Infosys’ decision to implement salary hikes, albeit lower than previous years, is a welcome move for its employees. It reflects the company’s efforts to balance employee satisfaction with the realities of a slowing industry. As the IT sector navigates these challenges, employees and companies alike will need to adapt to the evolving landscape.
For now, Infosys employees can take solace in the fact that their hard work and dedication have been recognized, even if the increments are more modest than expected. The focus now shifts to how the industry will rebound and what the future holds for IT professionals in India and beyond.
