Mumbai, Jan 7: IT major Infosys has reportedly deferred the annual salary hike in the fourth quarter of FY 2024-25. The company last implemented a salary hike in November 2023.The delay in the salary hike, which is usually implemented at the beginning of the year, indicates that the domestic IT sector is still facing uncertainties.
The reason cited for slowdown is that clients are not increasing their IT spending due to macro-economic situations, including potential tariffs under the new Donald Trump administration that will begin working from January 20.
Not only Infosys but some other large IT companies like HCL Tech, LTI Mindtree and L&T Tech Services also did not increase salaries in the second quarter this year to manage costs and profits.
Regarding Infosys, Motilal Oswal Financial Services had said in its pre-earnings note that Infosys’ margins may decline in the December quarter.
This is owing to employees going on leave and fewer working days. However, this will be compensated by price increases, subcontractor cost optimisation, and ‘Project Maximus’.
‘Project Maximus’ is Infosys’ margin improvement plan and its goal is to reduce costs.
In the second quarter (July-September) of the current financial year, the company’s profit grew 4.7 per cent year-on-year to Rs 6,506 crore, which was Rs 6,212 crore in the same quarter a year ago.
The company’s income in the second quarter was Rs 40,986 crore. This figure was Rs 38,994 crore in the same quarter of the previous financial year.
In the September quarter, Infosys increased its income growth guidance for the year from 3.75 per cent to 4.5 per cent. During this time, the IT giant also announced a dividend of Rs 21 per share.