India’s third-largest IT firm HCLTech told ET that senior employees will not get annual increments for this fiscal year while hikes will be deferred by a quarter for other staff.
Also read | HCL Tech Q1 Results: Profit rises 8% YoY to Rs 3,534 crore, misses estimates
Wipro has also delayed annual hikes by a quarter. The company has been facing margin pressure and widespread underperformance, especially of its banking financial services and technology vertical.
Also read | TCS Q1 Results: Profit rises 17% YoY to Rs 11,074 crore, beats estimates; revenue up 13%
India’s largest software exporter Tata Consultancy Services was the only company to have rolled out annual hikes in the first quarter itself, leading to a large margin setback of 200 basis points from increments.
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ETtechHiring in negative territoryThe Tata Group firm however has been delaying the onboarding of lateral hires, typically in the 3-10 years’ experience range. This is across multiple locations including Bengaluru, Pune and Mumbai. Project delays and rampdowns have been cited as the reason.
TCS is committed to honouring all offers made, said its executives on Wednesday, even as the $28 billion company will go slow on hiring.
Senior management won’t get hikes this year, said HCLTech MD and chief executive C Vijayakumar.
“And for junior and mid-management employees, it will be delayed definitely by a quarter,” said the US-based executive at the $12.6 billion firm. “While we do this, we will continue to closely monitor the industry trends and, as appropriate, take measures as required.”
Economic uncertainty has impacted the IT industry’s performance in the recently concluded quarter. On earnings calls, management cited discretionary spending cuts as clients are spooked by recession fears while flagging near-term demand softness.
“We did our last salary increase in September of last year, and we plan to do that for this year some time in Q3 (October-December),” Wipro chief financial officer Jatin Dalal said on an analyst call Thursday. “So at least for Q2, that’s not something that we are pencilling in at this point in time (in terms of margin pressure).”
TCS chief human resource officer Milind Lakkad said there have been delays because of the environment.
“As a result of that, the onboarding of associates is also delayed in certain cases,” he said during the earnings press conference on Wednesday. “But I commit today that we are going to honour all the offers.”
Labour union Nascent Information Technology Employees Senate (NITES) has complained against TCS to the ministry of labour and employment on behalf of the affected candidates.
Hiring, which is a key indicator of demand, has been in negative territory for most companies.
Wipro reported an 8,812 dip in headcount to 249,758 in the June quarter, while attrition was at an eight-quarter low of 17.3%. The company did not onboard freshers in the quarter, said Saurabh Govil, Wipro’s chief human resource officer.
“So we will again calibrate (hiring) based on demand. Today we have capacity,” he said, adding that the company will give about 80% variable pay for the quarter.
HCLTech’s headcount in the first quarter dropped by 2,506 over the previous quarter. The firm with a total strength of 223,438 attributed that and fewer lateral hires to falling attrition and deployment of freshers.
TCS, which employs over 600,000, added a net 523 employees in the first quarter against 821 in the preceding one, reflecting a slowdown in hiring. The company had added over 20,000 employees in the first quarter last year.
When asked if hiring would pick up in the coming quarters, TCS CEO and MD K Krithivasan told ET in an interview that it was too early to say.
“We have a substantial number of outstanding offers both in terms of laterals and freshers. We’ll calibrate new offers as we go along in Q2, Q3,” he said.
