 "Wipro")
Wipro is set to implement salary increases for its employees, beginning on December 1, according to a report by The Economic Times. The annual hikes will be merit-based and finalised over the forthcoming weeks before effecting in December.
This year, Wipro postponed the salary hike announcement by a quarter, reportedly due to macroeconomic headwinds and margin pressures. Delays in salary increases have been observed across numerous prominent IT companies this year, largely attributed to an industry slowdown, particularly in the banking and financial services (BFSI) sector.
In July, Wipro undertook strategic shifts to bolster profitability and improve its standing in the IT services sector. The company selectively reduced its client base and focused on contracts with higher margins and increased revenue potential. This strategy was deployed shortly after Wipro recorded a 2.8 per cent sequential decline in revenue for the June quarter. Additionally, in February of this year, the firm reduced the pay packages of new recruits by nearly 50 per cent compared to initial offers.
As previously reported by Business Standard, many IT firms are now looking to secure more "fixed-price contracts" as opposed to "time and material deals" to enhance margins. This trend has emerged following the first-quarter results of the current financial year and is also influenced by a global reduction in outsourcing expenditures.
An email to employees from Chief Human Resources Officer Saurabh Govil, as cited by The Economic Times, stated, "Despite the current challenging and uncertain global market conditions, we are pleased to announce that our merit salary increases (MSI) will take effect from December 1, 2023... Over the next few weeks, merit salary increases will be determined for eligible employees based on current compensation, skills, and performance."
