Infosys, Satyam to hike wages

Wipro takes lead with 2-3% hike.

Infosys Technologies and Satyam Computer Services will hike wages with effect from April 1, said executives.

Satyam Computer Services Chief Financial Officer V Srinivas said the company was in the process of finalising the proposed hikes and will come out with the details on April 21, during the fourth quarter earnings announcements.

Infosys will also increase wages and may announce the details on April 14. An Infosys executive said contrary to some analyst reports there was little to suggest that wage pressures have eased.

In a recent note to clients, the Citigroup had said offshore wage inflation pressures appeared to be moderating, noting that Infosys and Satyam had hinted about a likely 13-14 per cent wage hike in 2006-07, compared with the 15-18 per cent hike in 2005-06.

"It was onsite wage inflation that appeared to be creeping up," the note said.

On Tuesday, a Wipro executive said, the company has hiked onsite salaries of its employees by 2-3 per cent with effect from January 1. This hike could impact the company's January-March operating margins by 50-60 basis points.

Wipro had earlier increased offshore salaries by 12-14 per cent with effect from November 1. These salary hikes together would have an impact of 100-120 basis points on the operating margins for the March quarter.

The company did not increase onsite salaries in financial year 2004-05.

The executive said Wipro was hopeful that it would be able to contain the impact through other levers like increased offshore mix in revenues and an improved employee utilisation rate.

Wipro will detail its January-March earnings mid-April. The company does not give any earnings guidance.

In January, Wipro said it expects to report revenues of $510 million from global IT services business for the fourth quarter, or January-March period of 2005-06.