Wipro may skip hikes for “top performers with higher compensation” in its largest line of business in the upcoming round of salary revisions in December, according to an internal memo seen by Reuters.
The move comes at a time when India’s No.4 software services exporter is dealing with a host of problems from weak client spending to stiff competition from larger rivals.
“We are rolling out optional MSI (merit salary increases) based on our business affordability,” Nagendra Bandaru, managing partner and president of the “Enterprise Futuring” business line told employees in an email.
Wipro will prioritize lower-compensated employees among those eligible for promotion, Bandaru emphasized, adding that “higher-compensated top performers may not be covered in this cycle “.
Employees will receive their raises on December 1st.
Wipro Enterprise Futuring, one of four global business lines at the Bengaluru-based firm created as part of an organizational overhaul in April, deals with large-scale digital and technology transformation for companies.
Wipro did not respond to multiple requests seeking comment. Reuters could not verify whether the salary increase plan applied to the other business lines.
India’s $245 billion information technology industry, which has benefited greatly from a pandemic-induced boom in digital services, has struggled in recent quarters as clients have curbed spending on discretionary projects amid inflationary pressures and global economic uncertainty.
Salary bills are the largest contributor to expenses for IT companies, typically accounting for over 60%.
Such a move could affect employee morale and lead to greater productivity, according to Peter Bendor-Samuel, CEO at research firm Everest Group.
“The additional victim will help to rebalance the courts to meet the demand, and it will help to bring the cost back into balance with the demand,” he said.
Wipro, which had 244,707 employees as of September 30, had already delayed its salary hike cycle.
Some industry watchers said the move reflected a larger trend in the tech industry as it seeks to address wage disparities among regions and reduce payroll costs.
“We have also seen similar movements at many technology majors around the world over the past three quarters,” said Ray Wang, principal analyst and founder of Constellation Research.
Wipro’s peers are finding ways to reduce payroll costs. While Infosys delayed giving raises by two quarters, HCL failed to promote managers.
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Updated: 18 November 2023, 05:52 PM IST
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