Wipro might skip salary hikes to 'top performers with high compensation': Report
Earlier this week, the company asked its employees to return back to the office. The IT company expects employees to work from the office at least thrice a week from this month. The mandate will go into effect from November 15. Defaulters may face consequences from January 7 next year.
- Nov 9, 2023,
- Updated Nov 9, 2023 4:20 PM IST
Indian IT services company Wipro might skip annual hikes to "top performers with higher compensation" this year, Reuters reported on Thursday.
Salary revisions are made at the IT major in the month of December, the report noted. Employees will receive their raises on December 1, the company management announced during their Q2 FY 2023-24 results.
New hike policy
As per the report, the company is not completely forgoing salary hikes, but will roll them only for employees with low compensation. An internal memo seen by Reuters, Wipro will prioritise employees with lower compensation among those eligible for a raise. Nagendra Bandaru – the managing partner and president of the "Enterprise Futuring" business line – told employees that the company was undertaking a new approach to rolling out salary hikes.
Business Today was not able to independently verify this development.
Return to office at Wipro
Earlier this week, the company asked its employees to return back to the office. The IT company expects employees to work from the office at least thrice a week from this month. The mandate will go into effect from November 15. Defaulters may face consequences from January 7 next year.
Drop in headcount and analysts take on financials
The September ended quarter was Wipro's third consecutive quarter of headcount decline. The headcount fell by 5,051 in Q2 and 8,800 in Q1.
Analysts at Nirmal Bang noted that Wipro's order inflow was strong for the fourth consecutive quarter, it gave muted guidance of minus 3.5 per cent to minus 1.5 per cent QoQ CC growth for 2QFY24.
"A lack of discretionary short-term deals and weakness in BFSI, Technology & Telecom seem to be key problem areas. Wipro held on to EBIT margin of 16 per cent as the likely number in 2HFY24, despite salary hikes starting 1 December 2023 (delayed by one quarter)," the analysts said.
Nuvama Institutional Equities said Wipro’s muted Q2 performance and disappointing Q3 guidance reaffirm its troubles with converting deal-wins into growth.
They said, "The decline in H1 (and Q3 guidance) translates to Wipro reporting YoY decline for FY24 – significantly below peers. We continue to expect Wipro to underperform peers, primarily due to its intriguingly low correlation between deal-wins and top line growth. The stock’s inexpensive valuation and high dividend yield should limit downside potential in the medium-term."
Indian IT services company Wipro might skip annual hikes to "top performers with higher compensation" this year, Reuters reported on Thursday.
Salary revisions are made at the IT major in the month of December, the report noted. Employees will receive their raises on December 1, the company management announced during their Q2 FY 2023-24 results.
New hike policy
As per the report, the company is not completely forgoing salary hikes, but will roll them only for employees with low compensation. An internal memo seen by Reuters, Wipro will prioritise employees with lower compensation among those eligible for a raise. Nagendra Bandaru – the managing partner and president of the "Enterprise Futuring" business line – told employees that the company was undertaking a new approach to rolling out salary hikes.
Business Today was not able to independently verify this development.
Return to office at Wipro
Earlier this week, the company asked its employees to return back to the office. The IT company expects employees to work from the office at least thrice a week from this month. The mandate will go into effect from November 15. Defaulters may face consequences from January 7 next year.
Drop in headcount and analysts take on financials
The September ended quarter was Wipro's third consecutive quarter of headcount decline. The headcount fell by 5,051 in Q2 and 8,800 in Q1.
Analysts at Nirmal Bang noted that Wipro's order inflow was strong for the fourth consecutive quarter, it gave muted guidance of minus 3.5 per cent to minus 1.5 per cent QoQ CC growth for 2QFY24.
"A lack of discretionary short-term deals and weakness in BFSI, Technology & Telecom seem to be key problem areas. Wipro held on to EBIT margin of 16 per cent as the likely number in 2HFY24, despite salary hikes starting 1 December 2023 (delayed by one quarter)," the analysts said.
Nuvama Institutional Equities said Wipro’s muted Q2 performance and disappointing Q3 guidance reaffirm its troubles with converting deal-wins into growth.
They said, "The decline in H1 (and Q3 guidance) translates to Wipro reporting YoY decline for FY24 – significantly below peers. We continue to expect Wipro to underperform peers, primarily due to its intriguingly low correlation between deal-wins and top line growth. The stock’s inexpensive valuation and high dividend yield should limit downside potential in the medium-term."