Going back on its earlier decision, the country's second largest software firm, Infosys Technologies, is considering giving salary increments to its over 1 lakh employees.
According to sources in the IT major, Infosys has sent out an e-mail statement to its workforce saying that the "company has decided to carry out the compensation review exercise and limited need-based promotion from October 1, 2009."
This will be the first for the Indian IT industry as other top industry players like TCS, Wipro and HCL Technologies have all resorted to salary freezes in order to save costs in the wake of the current economic downturn.
Like its peers, Infosys had maintained so far that the company will abstain from any kind of salary hikes during the current financial year. T V Mohandas Pai, director, HR, Infosys confirmed the news to FE. However, he refused to divulge the quantum of hike and if the company will dole out increments across the board. According to industry experts, the move could be indicative of the market stabilising as signs of recovery start to appear the world over though large deals are still difficult to come by.
The e-mail, dated September 18, 2009, has been sent out by Infosys' group head of human resources Nandita Gurjar and said, "...In the current severe economic downturn, our focus has been the preservation of jobs. You will be happy to know that your company has decided to carry out the compensation review exercise and limited need-based promotion from effective October 1, 2009..."
In fact, in an earlier interview with FE, Infosys' chief operating officer D Shibulal had said that as one of the cost cutting measures, Infosys will not extend any salary increase to its employees this year. The impact of the move will translate in to roughly 2.2% to 2.6% of the company's revenues which works out to be between Rs 475 crore to Rs 560 crore.
The global economic crisis and the reduced IT spending globally has reduced the projected growth of the $50 billion Indian software exports industry to 4%-7% in fiscal year 2009-10 from around 14% registered in the last financial year, according to industry body Nasscom estimates.
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