Tech majors may reduce pay hikes by half as slump hurts

economictimes.indiatimes.com:

Indian IT firms could halve from a year ago as the $245-billion industry battles an unprecedented slowdown in tech spending globally, compelling some of the country’s top employers to look inward and boost margins instead of additions to the single-biggest P&L cost lineitem.

In FY23, amidst the tail end of buoyancy, increments in the sector averaged around 12-18%. Those could drop to 6-10% this year.

Elevate Your Tech Prowess with High-Value Skill Courses

“If current headwinds continue and global tech spending declines further, an average increment of 6-10% also looks optimistic to expect this year. However, 20% of the performing outliers will still receive significant hikes as enterprises invest on performers,” Kamal Karanth, cofounder of Xpheno, a Bengaluru-based specialist staffing firm, told ET.

“The also-rans and low performers should brace for the lower range increments, while better performing colleagues will be significantly ahead as part of the enterprise's retention plans. So, across the board, the current outlook on increments does not look encouraging,” he further said.

Also read | TCS may grow in single digits this fiscal year: CEO K Krithivasan

The average salary hike given to the employees of the largest IT firm TCS had fallen to single digits at 6-9% in FY23, after a 10.5% increase in the previous year, according to the annual report of TCS released in June. The raise for managerial positions also fell substantially to 13.6% last fiscal from 27.4% in FY22.

Over the last three years, as per data by Xpheno, IT Service