Wipro and HCLTech, two major IT companies in India, recently announced their financial results for the first quarter of the fiscal year 2023-24. Both companies reported deferred salary hikes and cutbacks on variable pay, indicating a trend in the Indian IT sector.
HCLTech’s management acknowledged that they fell short of analyst estimates and their own projections for the quarter. They are taking active measures to align with their previous projections, including deferring salary hikes for a certain section of their staff. The annual salary hikes for senior employees have been postponed to October, whereas in previous years, they were implemented in the September quarter. The company aims to return to the 18-19 percent growth range by implementing these actions.
In the case of Wipro, they also announced a quarter-long deferral of annual salary hikes for their employees. Wipro plans to implement this year’s hike in the third quarter. Additionally, the company implemented cutbacks on variable pay, capping it at 80 percent for the first quarter of the fiscal year.
Both companies faced challenges in meeting analyst estimates, and their actions of deferring salary hikes and reducing variable pay reflect their efforts to align with their business requirements and adapt to the current environment. Wipro reported a 11.95 percent YoY rise in consolidated net profit and a 6.04 per cent YoY increase in revenue for the first quarter, falling short of analyst estimates. HCLTech reported a 7.6 percent rise in consolidated net profit and a 12 percent increase in revenue for the same period.