Wipro, HCL Tech Postpone Salary Hikes, Cut Back on Variable Pay

Wipro and HCLTech last week declared their Q1 FY24 financial results, which missed analysts’ estimates as well as the companies’ own projections. Among the steps the companies are taking is that it has deferred salary hikes for employees. It has also cut back on variable pay.

HCL Tech has postponed the annual salary increments of senior employees to October, according to a Business Today report. Until FY23, the salary hikes were rolled out in the July-September quarter.

According to the report quoting HCL Tech CFO Prateek Aggarwal, “Based on the actions we have announced, we are confident in returning to the 18-19 per cent range. The actions include wage increment deferrals for senior staff and a decision on junior staff increments to be made in October.”

Aggarwal also said variable pay will be determined “in line with company policies and results”.

Speaking to media after Q1 results, Wipro Chief Human Resources Officer Saurabh Govil said the variable pay of employees will be capped at 80 per cent for Q1 FY24.

However, TCS has rolled out its annual salary increase across its workforce, with effect from April 1, 2023.

Wipro’s consolidated net profit for Q1FY24 rose by 12 per cent year-on-year (YoY) to Rs 2,870.1 crore. But sequentially it was down 6.65 per cent. Income from operations for the quarter stood at ₹22,831 crore, up 6 per cent YoY and down 1.5 per cent QoQ.

Tata Consultancy Services (TCS), on the other hand, posted decent results for the first quarter of this fiscal FY24) — revenue of $7.2 billion in Q1FY24, flat QoQ in CC and a tad below analysts’ estimate of 0.3 percent CC. Shares of TCS have gained over 12 per cent in the last one year. TCS hit their 52-week high of Rs 3,575 on February 16, 2023. As of July 13 close, they are about 7 per cent down from their one-year peak.

HCL Technologies reported a weak Q1FY24 with revenue of $3.2 billion, down 1.3 percent QoQ in CC and 110 basis point below analysts’ estimate, but maintained its FY24E guidance both on growth and margin. Continued ramp-downs in Telecom and Technology verticals, mainly in ER&D (engineering research and development) (-5.2 percent QoQ in CC), led to the underperformance.