Fat pay-packets in IT sector could be a thing of the past
IT majors like TCS, Wipro & Infosys are planning to reduce the salary increases for the new fiscal, reports Venkatesh Ganesh.india Updated: Jan 31, 2008 02:50 IST
Fat pay-packets in the IT sector could soon be a thing of the past – at least for a while.
IT majors like TCS, Wipro and Infosys are planning to reduce the salary increases for the new fiscal year starting in April, according to industry sources. Increases are expected to be around 7-8 per cent as against 15 per cent last year.
According to placement firms, hiring could also be reduced by 20 per cent as IT companies make better use of staff hired but not deployed – called ‘the bench.’
“I am not expecting a major salary hike this time,” says Hari Iyer who is working for a software firm.
“From my interactions with the HR department and my colleagues, I have learnt that the salary hikes will be 8 per cent across the board,” he adds.
Anjali Ramanathan, another employee working for a Mumbai-based IT major, says that she will pass up the Skoda car she was planning to buy as she can no longer manage monthly payments on a car loan in addition to an existing home loan.
A rising rupee which has appreciated by 13 per cent over the past year against the US dollar has made exports more difficult, while a likely recession in the US is threatening demand for Indian software exporters who bill clients in US dollars. Salary squeezes and higher efficiency in staff utilization are the obvious ways out.
Spokespersons at Infosys and Wipro said they do not comment on wage hikes in advance. TCS had sent an email to its employees saying that there could be across-the-board cut in salaries based on its recent performance. "The pay cut of 20 per cent was due to internal targets that were not met for the October-December quarter 2007," said a TCS spokesman
“The HR department has not officially communicated with us but in our informal communication, we get a sense that wage hikes would be not more than 8 per cent,” says Ramanathan.
IT companies could also be recruiting less than in 2007, when the top five IT companies added more than 50,000 employees. “Companies will be more conservative in their hiring and they will reduce people on the bench,” says Vikram Bharadwaj, Managing Director, Redileon, a staffing company.