HCLTech, India’s third-largest IT services firm, partially started rolling out wage hikes for junior employees in the October-December quarter, Moneycontrol reported on Tuesday. The development came a day after the country’s second-largest information technology services company, Infosys, reportedly deferred its annual wage hikes to the fourth quarter of the current financial year (Q4FY25).
According to the report, most HCLTech employees received increments of 1-2 per cent, while the top performers received a 3-4 per cent salary hike.
IT firms delay wage hike
It may be noted that the latest report contradicts HCLTech’s management commentary that it will offer 7 per cent average annual pay hike and a 12-15 per cent raise for top performers.
Apart from Tata Consultancy Services (TCS), most of the top IT firms in India delayed wage hike cycles in FY2025, which typically happens earlier in the fiscal year.
With this practice, IT companies are reportedly trying to defend margins amid uncertainty over discretionary spending and a challenging demand environment.
Citing sources, Moneycontrol reported that HCLTech started rolling out hikes for the E0, E1, and E2 level staff – who are predominantly junior employees with roughly up to 10 years of experience.
However, the employees in the E3 band and above – mid to senior level – are yet to get hikes. To this claim, HCLTech’s management said that they skipped compensation reviews for senior to management-level employees for the year FY2024.
“E0-E2 got their letters in December last week. They got only about 1-2 per cent hikes and even top performers got maximum 3-4 per cent hikes. Employees in the E3 band and above are still awaiting appraisals, many of them didn’t get hikes for the last two years at least, and even three years for E4 levels,” the news portal quoted an employee as saying.
HCLTech’ reaction
Reacting to Moneycontrol’s queries, HCLTech reiterated its commentary from the Q2 earnings conference. It said, as the business website quoted, “Typically, every year when you look at the review cycle, given the fact that we have a higher proportion of people who come in laterally into our system, who will become eligible for increases at the point of completing a year, the number of individuals eligible for increases during a given cycle. It is a function of that, plus the performance (sic).”
“If I look at the average for all our colleagues in India, it will be in the range of about 7 per cent. But, as is always the case, increases are linked to performance, and top performers will continue to see double-digit increases in the range of 12-15 per cent. So, that’s the way we have planned our increases. It will all take effect from this month onwards. We have our own comp review cycles, which we follow every year,” the news portal quoted HCLTech’s chief people officer Ramachandran Sundararajan as saying.
Infosys defers wage hike
On Monday, the business website reported that Infosys deferred hikes to the fourth quarter of the current financial year.
The wage hike delays highlight the prevailing uncertainty in global demand, especially for IT services. Many IT majors are facing challenges, including low discretionary spending, delayed client budgets, and macroeconomic volatility.
Apart from Infosys, its competitors, such as LTIMindtree and L&T Tech Services, have delayed salary increments in the second quarter to maintain profitability.
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