Wipro likely to skip pay hikes for top performers in key business line

Bengaluru: Wipro may skip giving hikes to "top performers with higher compensation" in its largest business line in the upcoming round of salary revisions in December, according to an internal memo seen by Reuters.

The move comes at a time when India's No.4 software services exporter is dealing with a plethora of problems ranging from weak client spending to tough competition from larger rivals.

"We are doing a selective MSI (merit salary increases) rollout based on our business affordability," Nagendra Bandaru, the managing partner and president of the "Enterprise Futuring" business line told employees in an e-mail.

Wipro will prioritise employees with lower compensation among those eligible for a raise, Bandaru highlighted, adding that "top performers with higher compensation may not be covered in this cycle".

Employees will receive their raises on December 1.

Wipro Enterprise Futuring, one of four global business lines at the Bengaluru-based firm created as part of an organisational overhaul in April, deals with large-scale digital and tech transformation for companies.

Wipro did not respond to multiple requests seeking comment. Reuters could not verify if the salary hike plan applied to the other business lines.

India's $245 billion information technology industry, which had gained immensely from a pandemic-induced digital services boom, has been struggling in recent quarters as clients curtailed spending on discretionary projects amid inflationary pressures and global economic uncertainty.

Salary bills are the biggest contributor to expenses for IT companies, typically accounting for over 60%.

Such a move might affect employee morale and lead to more attrition, according to Peter Bendor-Samuel, CEO at research firm Everest Group.

"The additional attrition will help rebalance benches to meet demand, and will help bring cost back into balance with demand," he added.

Wipro, which had 244,707 employees as of Sept. 30, had already delayed its salary hike cycle.

Some industry watchers said the move echoed a larger trend in the tech industry as it tried to address pay inequities among regions and cut payroll costs.

"We have also seen similar moves at a lot of tech majors around the world over the past three quarters,” Constellation Research's principal analyst and founder Ray Wang said.

Wipro's peers have also been finding ways to cut payroll costs. While Infosys delayed giving hikes by two quarters, HCL skipped hikes for managers.