Indian IT firms cut pay hikes amid global recession fears
BENGALURU, INDIA —Major IT services companies and global tech giants with offices in India announced reduced or deferred annual salary increments and promotions this year due to an increasingly likely global recession.
Tech and consulting firm Infosys rolled out an average pay hike of less than 10% for employees, with some getting single-digit raises and others getting low double-digit hikes. This is significantly below the 20% yearly hikes IT firms used to provide pre-pandemic. Infosys is not offering any hikes to new hires this year.
Promotions have also been frozen, and the few employees who got promoted received 10-20% raises as opposed to the regular 50% hike for promotions. Entry-level employees have been excluded from the latest round of salary increments.
United States and Europe-headquartered IT giants have also enforced similar belt-tightening measures around hikes and promotions. Accenture, for example, announced a salary hike freeze within its offices in India and Sri Lanka this year “ to balance competitive pay with the need to manage costs.”
Multiple firms have cited an increasingly likely global recession due to issues like high inflation, rising interest rates, and the Russia-Ukraine war.
The austerity drive began last year but was initially expected to end within six months. However, with recession fears mounting, it has continued and expanded across the industry.
“No one knows when the phase will end, and halcyon days will come back. During the Corona phase, the demand for skilled employees in the IT sector had reached its peak. Performers were lured with advance bonuses, costly gifts like BMW bikes, and others. All that seems to be a dream now,” said an IT professional working for a U.S.-headquartered company.
Meanwhile, experts note that while cost-cutting is essential in a challenging business environment, continued investment in innovation and employee skill development is equally vital within the industry.
