HCLTech announces 1-4% salary hikes for junior employees

NOIDA, INDIA — HCLTech, India’s third-largest IT services provider, has introduced salary hikes ranging from 1% to 4% for its junior-level employees in the E0, E1, and E2 bands.
These increments, effective from October, are being implemented during the third quarter (October to December). According to sources familiar with the matter, top-performing employees will receive raises of 3-4%, while others will see lower increments of 1-2%.
Performance-based salary adjustments explained
The company clarified that these adjustments are performance-linked. An HCLTech spokesperson stated that while top performers across all levels could receive double-digit increases of 12-15%, the average salary hike across all employees in India will remain around 7%, as previously projected during the Q2 earnings commentary.
“Given the fact that we have a higher proportion of people who come in laterally into our system… the number of individuals eligible for increases during a given cycle is a function of that, plus the performance,” the spokesperson explained.
No raises yet for mid- and senior-level staff
While junior employees have already received their letters confirming these adjustments in late December, mid- and senior-level employees (E3 and above) have not yet been granted salary increases.
This decision comes amidst a challenging macroeconomic environment marked by restrained client spending and cost optimization efforts in the $254-billion technology services industry.
Competitive landscape and industry trends
HCLTech’s announcement follows varied compensation strategies by its competitors. Infosys recently disbursed 90% of performance bonuses for Q2 but delayed annual salary hikes for FY2025.
Similarly, Tata Consultancy Services (TCS) has postponed its increments. Analysts suggest that such delays may help companies maintain stable margins during periods of stagnant client spending.
Despite these challenges, HCLTech is expected to lead growth among tier-I IT services companies in Q3. The broader IT sector’s earnings season began with TCS announcing their results last January 9, followed by Infosys on January 16 and Wipro on January 17.
Sector outlook amid wage adjustments
The IT industry continues to face a tough macroeconomic environment with stagnated client spending and a focus on cost efficiency.
While some companies like Wipro and LTIMindtree are rolling out wage hikes, others delaying increments may see stable or improved margins for Q3. HCLTech’s move reflects its strategy to balance employee compensation with financial performance in this challenging climate.