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According to Infosys Chief Financial Officer Jayesh Sanghrajka, some increments will take effect in January, while the remainder will be rolled out in April 2025.
Infosys manages a slight improvement in its margins by 10 basis points, supported by lower onsite costs, better resource utilisation, and enhanced operational efficiency.
Infosys, India’s second-largest IT services company, has decided to postpone its annual salary hikes to the fourth quarter of FY25, according to a Moneycontrol report. The previous round of salary revisions took place in November 2023. Unlike the usual practice of implementing increments earlier in the year, the delay highlights the ongoing challenges posed by a volatile global market, especially in the domain of discretionary IT services.
Amid weakened client budgets, cautious discretionary spending, and persistent macroeconomic headwinds, several major IT players, including HCLTech, LTIMindtree, and L&T Technology Services, have also opted to defer pay raises during Q2 in an effort to maintain profitability and control costs.
Infosys had earlier indicated its intention to implement pay hikes in a staggered manner during Q4. According to Chief Financial Officer Jayesh Sanghrajka, some increments will take effect in January, while the remainder will be rolled out in April 2025.
During the second quarter, Infosys reported a 2.2 per cent sequential increase in net profit, amounting to Rs 6,506 crore, which fell short of market expectations. However, the company managed a slight improvement in its margins by 10 basis points, supported by lower onsite costs, better resource utilisation, and enhanced operational efficiency.
Despite the absence of immediate pay revisions, analysts from Motilal Oswal Financial Services predict that the company’s margins may face pressure in the December quarter, primarily due to seasonal furloughs and reduced working days. Nonetheless, potential margin erosion could be mitigated by factors such as improved pricing, optimisation of subcontractor expenses, and Infosys’ cost-efficiency initiative, Project Maximus.
Project Maximus, which aims to enhance operational profitability, has become a key part of Infosys’ margin management strategy.
From an employee perspective, the current stagnant job market appears to have reduced concerns about heightened attrition due to deferred pay increases. Selective increments continue to be offered by certain delivery teams to high-performing employees, particularly in specialized fields such as artificial intelligence, where retaining top talent remains crucial. In today’s uncertain economic environment, holding on to a job itself is being viewed by many as a significant advantage.
