In an internal memo obtained by Reuters, Wipro, India’s fourth-largest software services exporter, is reportedly considering skipping salary hikes for “top performers with higher compensation” in its largest business line during the upcoming round of salary revisions scheduled for December. The decision comes as the company grapples with various challenges, including weak client spending and fierce competition from larger rivals.
Nagendra Bandaru, the managing partner and president of Wipro’s “Enterprise Futuring” business line, informed employees in an email that the selective rollout of merit salary increases (MSI) would be based on business affordability. Bandaru emphasized that the focus would be on prioritizing employees with lower compensation, with the possibility that “top performers with higher compensation may not be covered in this cycle.”
Wipro’s Enterprise Futuring is one of four global business lines created as part of an organizational overhaul in April, specializing in large-scale digital and tech transformation for companies. The company, which had already delayed its salary hike cycle, did not respond to multiple requests for comment, and Reuters could not verify if the plan applied to other business lines.
India’s $245 billion information technology industry, which initially benefited from a pandemic-induced digital services boom, has been facing challenges in recent quarters as clients cut spending on discretionary projects amid inflationary pressures and global economic uncertainty. Salary expenses constitute the largest contributor to costs for IT companies, typically accounting for over 60 percent.
Industry watchers express concerns that such a move might impact employee morale and lead to increased attrition. Peter Bendor-Samuel, CEO at research firm Everest Group, noted that the additional attrition could help rebalance benches to meet demand and bring costs back into balance with demand.
Wipro, with 244,707 employees as of September 30, is navigating a challenging landscape alongside its peers. Other major players in the industry, such as Infosys and HCL, have also taken measures to cut payroll costs, including delaying salary hikes and skipping hikes for certain managerial positions. Observers suggest this trend reflects broader efforts within the tech industry to address pay inequities among regions and manage payroll costs amid economic uncertainties.
