{"id":32330,"date":"2024-04-22T04:31:28","date_gmt":"2024-04-22T04:31:28","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/04\/22\/top-it-firms-saw-wage-bills-rise-5-5-even-as-revenue-growth-dips\/"},"modified":"2024-04-22T04:31:28","modified_gmt":"2024-04-22T04:31:28","slug":"top-it-firms-saw-wage-bills-rise-5-5-even-as-revenue-growth-dips","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/04\/22\/top-it-firms-saw-wage-bills-rise-5-5-even-as-revenue-growth-dips\/","title":{"rendered":"Top IT firms saw wage bills rise 5.5% even as revenue growth dips"},"content":{"rendered":"
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Tata Consultancy Services<\/a> (TCS), Infosys<\/a> and Wipro<\/a> saw their wage cost<\/a> in FY24 increase by more than 5.5% on average from the previous year, even as their year-on-year revenue growth<\/a> slowed, averaging 3.6%.
Their cumulative wage cost went up by Rs 18,036 crore in FY24, which experts attributed to continuity in lateral hiring in high-demand areas<\/a> such as artificial intelligence (AI), machine learning (ML), and cloud and engineering services, coupled with the salary increments<\/a>, even though they are in the lower single digits.<\/p>\n
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Analysts said higher wage base as a result of high attrition<\/a> and high demand during the Covid-19 pandemic is still acting as a headwind for IT companies<\/a> wanting to normalise their wage bills.<\/p>\n

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ETtech<\/span><\/figure>\n<\/div>\n

Many resources in high-demand areas like AI and engineering services are still being laterally hired by companies at 20-30% hike, said experts.<\/p>\n

TCS, which has more than 600,000 employees, saw its wage bill increase by 9.5\u2105 y-o-y. The jump was 5\u2105 for Infosys and 2.4\u2105 for Wipro. This was in contrast with companies registering negative to flat growth in recent quarters.<\/p>\n

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Also read | <\/strong>TCS reports dip in Q4 hiring, full-year attrition cools to 12.5%<\/a><\/p>\n

TCS, Infosys and Wipro are three of India\u2019s top five IT companies. They reported their fourth-quarter and annual revenues over the last two weeks. Their cumulative drop in headcount for FY24 was a record of about 64,000.<\/p>\n

\u201cThere is lateral hiring being done in selected areas like cloud, AI, analytics and engineering services where IT companies are seeing growth. Wages for these skills are at a high level because of demand,\u201d said Gaurav Vasu, CEO of UnearthInsight. \u201cDespite that, IT companies are also giving annual hikes even though they are in single lower and higher digits.”<\/p>\n

While TCS announced 4.5-7% salary increments starting in April, with double-digit hikes for the high performers, Infosys and Wipro are yet to disclose their numbers on appraisal and fresher hiring.<\/p>\n

Last fiscal, both Infosys and Wipro had given annual hikes to their employees, although the appraisal cycle got deferred by a few months.<\/p>\n

Also read | <\/strong>Infosys Q4 net profit jumps 30%; company buys German tech firm for \u20ac450 million<\/a><\/p>\n

This week, Infosys said future hiring will depend on employee utilisation, and it has adopted a flexi-hiring model. Wipro, on the other hand, is in the process of giving priority to complete the offers already given to freshers during the pandemic.<\/p>\n

Vasu said lower attrition is another factor that is not helping these companies to normalise their wage bills. He said he expects the wage bill to get normalised by the end of this fiscal.<\/p>\n

Attrition at the end of the fourth quarter of FY24 for TCS, Infosys and Wipro was down to 12.5%, 12.6% and 14.2%, respectively, from 20.1%, 20.9%, and 19.4% a year ago.<\/p>\n

Omkar Tanksale, equity research analyst at Axis Securities, said the Covid era excess hiring is still haunting the IT companies.<\/p>\n

Also read | <\/strong>Wipro Q4 net profit is down 7.8% to Rs 2,835 crore<\/a><\/p>\n

According to him, the high wage levels of those days because of high attrition and high demand can\u2019t be brought down now at a time when project pace is getting slower and there are ramp downs and rescoping.<\/p>\n

\u201cHowever, margins for them are still better despite increase in wage cost, and that is because they have reduced onsite expenses by deploying fewer employees there,\u201d he said. \u201cHiring slowdown and reduced sub-contracting costs have also helped them bring up their margins.\u201d<\/p>\n

While TCS and Wipro saw 50 bps y-o-y improvement in their operating margins in FY24, Infosys\u2019 margin decreased by 40 bps at 20.7%, though it remained within its margin guidance of 20-22% for FY24 and FY25.<\/p>\n

TCS saw its headcount decline by 13,249<\/a>, or 2.1%, in FY24 to 601,546, but its employee benefit expenses<\/a> grew by 9.2% to Rs 1,40,131 crore from Rs 1,27,522 crore in FY23.<\/p>\n

Infosys ended FY24 with 25,994 fewer employees<\/a>, down by 7.5% to 317,240. However, this didn\u2019t bring down its wage cost. Instead, Infosys\u2019 employee benefit expenses grew by 5.4% to Rs 82,620 crore in FY24 from Rs 78,359 crore in FY23.<\/p>\n

Wipro ended FY24 with 234,054 employees<\/a>, a drop of 24,516 from the previous year. Correspondingly, the IT major\u2019s employee benefit expenses in FY24 grew by 2.1% from the previous year to Rs 54,930 crore.<\/p>\n<\/div>\n


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Tata Consultancy Services (TCS), Infosys and Wipro saw their wage cost in FY24 increase by more than 5.5% on average from the previous year, even as their year-on-year revenue growth slowed, averaging 3.6%.Their cumulative wage cost went up by Rs 18,036 crore in FY24, which experts attributed to continuity in lateral hiring in high-demand areas […]<\/p>\n","protected":false},"author":2,"featured_media":32331,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","fifu_image_url":"https:\/\/img.etimg.com\/photo\/msid-42031747\/et-logo.jpg","fifu_image_alt":"","footnotes":""},"categories":[607],"tags":[29974,14757,7153,36199,1966,569,36200,5389,15183,2891,17502,572,30481,5385,1846,19363,36198,5384],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/32330"}],"collection":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/comments?post=32330"}],"version-history":[{"count":1,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/32330\/revisions"}],"predecessor-version":[{"id":32332,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/32330\/revisions\/32332"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media\/32331"}],"wp:attachment":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media?parent=32330"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/categories?post=32330"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/tags?post=32330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}