HCL Tech to withhold salary increments for senior employees in 2023

HCL Technologies is implementing cost-saving measures to reach its targets following lower earnings in the June quarter due to reduced technology spending and low profits


HCL Technologies has decided to withhold salary increments for senior employees this year due to a weak first quarter, according to Prateek Aggarwal, chief financial officer, HCL. However, junior and mid-level employees will receive appraisals, although the distribution process will be delayed by a quarter.

In addition to these measures, the company is implementing cost-saving actions to meet its targets. The company aims to reduce costs after reporting lower earnings for the June quarter, attributed to a slowdown in technology spending and weak profitability.

As per the fiscal year 2024 guidance, HCL expects a year-on-year revenue growth between six and eight percent in constant currency. The projected growth for constant currency services revenue is between 6.5 and 8.5 percent. The company’s EBIT margin guidance remains constant at 18-19 percent.

For the first quarter ended June 30, 2023, HCL reported a consolidated net profit of Rs 3,534 crore, representing a 7.6 percent increase compared to the previous year. However, this figure fell short of the estimate in the CNBC-TV18 poll, which was Rs 3,809 crore. Subsequently, the net profit declined by 11 percent compared to the previous quarter, which amounted to Rs 3,983 crore.

The company’s revenue from operations reached Rs 26,296 crore, a nearly 12 per cent increase from the same period last year.

During the quarter, HCL reduced its workforce by more than 2,500 employees, resulting in a total headcount of 223,438. While the firm hired 1,597 freshers during this period, attrition eased further to 16.3 percent, marking the second consecutive quarter below the 20 percent threshold.

In the previous quarter (January to March 2023), the company had a net addition of 3,674 employees and hired 4,480 freshers.


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