Wipro caps variable pay at 80% for Q1 FY24, to defer annual salary hike 

Indian IT services company Wipro has announced a delay in its wage hike cycle for the fiscal year. The company plans to carry out the pay raise in the third quarter of the year instead of Q2, like it usually does.

Wipro defers annual increments

In a press conference held after the announcement of  its Q1 FY 2023-24 results, Jatin Dalal, Wipro's Chief Financial Officer (CFO), said: “We did our last salary increase in September of last year, and we plan to do that for this year sometime in quarter three."

Similar steps at HCLTech

Similar steps are being taken at other Indian IT services companies as well. In an exclusive interaction with Business Today, HCLTech’s Chief Financial Officer Prateek Aggarwal also noted that the company would be deferring annual hikes made to a section of employees.

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

Cutbacks on variable pay

Not just annual salary hikes, Wipro is also cutting down on variable pay of employees amid macroeconomic uncertainties. The Chief Human Resources Officer of the company, Saurabh Govil, noted that the variable pay of employees would be capped at 80 per cent for Q1 FY 24.

Govil said during the same press conference, “Our variable pay will be around 80 per cent in Q1 in spite of this environment. We will continue to do what is required for our employees but continue to calibrate with the business requirement.”

Wipro’s Q1 FY24 results and outlook for Q2

On Thursday, Wipro reported a 11.95 per cent year-on-year (YoY) rise in consolidated net profit at Rs 2,870.1 crore compared with Rs 2,563.60 crore in the same quarter last year. Revenue for the quarter rose 6.04 per cent YoY to Rs 22,831 crore compared with Rs 21,528.60 crore in the corresponding quarter last year. Despite that, it is worth noting that the profit growth fell short of analyst estimates.

For Q2 FY 24, Wipro has guided for IT Services business segment revenue in the range of $2,722 million to $2,805 million. This translates to a sequential guidance of minus 2 per cent to 1 per cent in constant currency terms.

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