BENGALURU: The era of predictable April salary hikes for IT firms is fading. What was once a dependable annual cycle has been replaced by single-digit increases and a cautious approach, often leaving employees uncertain about when or if raises will come.
Cost Management Intensifies
For many IT companies, this reflects a familiar cost management strategy now applied more aggressively. Salary hikes are being deferred or staggered throughout the year, with employee costs used as a routine lever to protect profitability. Increments are no longer uniform or time-bound but calibrated to business conditions.
Impact on Workforce
The impact varies across roles. Junior employees generally receive more modest but relatively protected adjustments. In contrast, mid-level and senior executives face sporadic increases closely tied to performance, margins, and demand visibility. Compensation is becoming increasingly conditional.
Recent Examples
Wipro rolled out salary hikes in March 2025 after a gap of nearly 18 months, following a previous round in September 2024. For the current fiscal year, barring TCS, Infosys, Wipro, and HCLTech have yet to clearly specify the timing of hikes, reinforcing growing uncertainty around pay cycles.
Structural Shift
At the heart of this transition is a deeper question: how companies deploy savings from workforce optimization. The risk is that firms rely too heavily on cost-cutting—deferring hikes, tightening performance filters, and reducing headcount—without reinvesting enough into building an AI-ready operating model. The shift is from performance management to margin management, with employee costs treated as a short-term lever.
Normalization of Layoffs
This change is also driven by the normalization of layoffs as a management tool. Once a last resort, layoffs are now used more systematically to manage costs. Zensar CEO Manish Tandon attributes the trend to margin pressures and persistent uncertainty. “Salary hikes are permanent commitments, while demand conditions remain dynamic. Companies want to retain flexibility, and that’s why many are deferring or staggering increases over time,” he said, adding that Zensar rolled out hikes on time.
