Bengaluru, January 6: Infosys has reportedly delayed the annual salary hikes of its employees to the fourth quarter of Q4FY25. India's second-largest tech company implemented the salary hike in November 2023, based on which it was expected to announce earlier. Infosys salary hikes were deferred due to factors such as the global demand environment, delayed client budgets, and macroeconomic uncertainties.

According to a report by Moneycontrol, salary hikes used to be typically implemented earlier in the year; however, Infosys's delay suggested that discretionary IT services were uncertain in the global demand environment. The tech industry had witnessed challenges that led them to skip the increments last year in order to maintain their profits and reduce costs. US Layoffs 2025: Job Cuts Coming to United States This Year As Companies Adjust Their Workforce to Prepare for Market Shifts, Says Report.

The report said that along with Infosys, its rival companies, including HCLTech, L&T Tech Services, and LTMindtree, skipped the salary hikes in the second quarter. This decision focused on cost reduction and sustaining their profits. On October 17, Infosys CTO Jayesh Sanghrajka announced that it was planning to increase the wages in Q4 in a phased manner effective in January and that the balance would be effective in April.

However, Infosys reported a mild increase in its profits with a 2.2% quarter-on-quarter rise to INR 6.506 crore and witnessed margins improved by 10 basis points due to lower onsite costs. Further, it was attributed to improved utilisation rates and operational efficiencies. This reportedly missed out on the Street expectations. 

Motilal Oswal Financial Services already mentioned, despite the absence of a wage hike, that the company's margins would be affected negatively in the December quarter due to furloughs and a few working days. This was said to be offset by Project Maximus, which aimed to improve margins, pricing gains, and optimisation of subcontractor cost. Foxconn Ramps Up Production of NVIDIA GB200 AI Servers Ahead of GB300 Launch at GTC 2025: Report.

The report suggested that withholding or delaying the salary hikes would not lead to resignations amid the stagnant job market, giving tech companies an edge. Despite the deferred increment, Infosys offered a hike to top performers, rewarding their "exceptional talent" in areas like artificial intelligence (AI).

(The above story first appeared on LatestLY on Jan 06, 2025 10:26 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).