Accenture to skip pay hikes, reduce bonuses for employees in India, Sri Lanka

IT services major Accenture said it would not be paying hikes to its employees in India and Sri Lanka in 2023, except where it is legally mandated or where it has committed to it in critical skill areas.

Country Managing Director Ajay Vij wrote to employees in an email, “Given the context of our performance, we will not be providing any stay-at-level (base pay) increases this year except where legally mandated or committed in a few critical skill area.”

Vij explained that the IT company faced macro headwinds in the time period and growth has been lower than anticipated. He noted that the company would be keeping employee payroll in line with the market trends.

 “Our rewards philosophy is to provide market relevant pay based on skills and location that is affordable for Accenture. Keeping our payroll aligned with the market is essential to the health of our business, including competitive pricing of our services,” the email read.

Moneycontrol reported this development first. They noted that the company would roll out reduced bonuses to employees and will also postpone promotions until June 2024.

Accenture’s headcount is at 7,33,000 people, as per its website. Over 3 lakh employees of the company are based out of India. In March 2023, the IT major had announced that it would lay off 19,000 employees.

The company follows the September to August financial year. In the fiscal ended August 2023, the revenue of the company went up 4 per cent and was at $16 billion. The operating income came down 16 per cent, and was at $1.91 billion. Operating margin was down 270 basis points to 12 per cent.

The net profit of the company was down 18 per cent, and was at $1.37 billion. New bookings fell to $16.6 billion from $18.4 billion a year ago, with a near-even split of the bookings coming from consulting and managed services. Overall, consulting revenue fell 2 per cent, while managed services revenue decreased 10 per cent.