Accenture freezes salary hikes amid industry slowdown
MUMBAI, INDIA — Global IT services and consulting firm Accenture will not increase salaries for most of its over 300,000 employees in India and Sri Lanka this year, except where legally mandated or for critical skill areas.
The decision aligns with the company’s compensation strategy to balance competitive pay with the need to manage costs in the face of global economic conditions and internal growth concerns.
However, it also reflects broader challenges facing India’s IT sector amid slowing demand and margin pressures.
Major Indian IT companies like Wipro and HCL Technologies have similarly deferred or delayed planned salary increases this year. The industry is staring at a washout in the current fiscal year ending March 2024, though some see potential for recovery in the next fiscal.
The economic landscape remains uncertain, and companies like Accenture are making strategic decisions to navigate these challenges while striving to maintain stability and sustainability.
Performance bonuses will also be reduced at Accenture, and promotions will be delayed, with promotions up to Associate Director (Level 5) scaled back and those for levels 1 through 4 postponed until June 2024.
The move comes as Accenture faces challenges after announcing 19,000 layoffs earlier this year and reporting mixed financial results with weak FY24 guidance.
Despite these challenges, Accenture maintains a robust financial position, with high earnings quality and a strong return on invested capital. The company grew its earnings per share and raised its dividend for four consecutive years, promising strong shareholder returns.
Accenture also maintained 4% revenue growth over the past year with a US$197 billion market cap and a 28.58 P/E ratio. Meanwhile, its gross profit stands at US$20.7 billion with a 32% margin, showing potential for long-term growth.
