According to details provided by MoneyControl, Accenture, a prominent IT giant in India, has sent an email to employees stating that it will not be providing salary hikes to its employees in India and Sri Lanka in 2023, except where legally mandated or committed to in critical skill areas. Accenture India's managing director, Ajay Vij, informed workers of the decision. Here's everything we know so far.
The decision comes at a time when the IT sector is facing a number of hurdles, and Accenture's own growth has fallen short of expectations. In March 2023, the firm announced its intention to lay off 19,000 people, reflecting the difficult operating climate even more. Following a fiscal year that ran from September to August, the Dublin-based company announced mixed financial performance in the previous quarter. Its projection for FY24 was among the lowest in the previous 16 years.
Ajay Vij said in his email that Accenture's compensation approach attempts to deliver competitive pay depending on talents and location while remaining cost-effective for the organization. As a result, except when legally necessary or in particular important skill areas, the corporation will not give basic pay increases this year.
Individual performance bonuses will be awarded depending on contributions, according to the email, but they will be "significantly lower than last year." Furthermore, the corporation is cutting promotions. Promotions up to the rank of Associate Director (rank 5) will take place in December as planned, but at a slower rate than the previous year. To fit with the company's growth plans, promotions for levels 1 through 4 have been postponed until June 2024.
Accenture's moves reflect the broader issues confronting India's IT sector. Other prominent IT businesses in India have taken similar moves. HCLTech said last quarter that it would forego wage increases for senior management and postpone raises for younger employees by a quarter. Wipro pushed back its compensation increases from September to December 2023, while Infosys has failed to execute the raises that were originally scheduled for April and July.
Accenture currently employs approximately 300,000 people in India. Accenture's announcement highlights the industry's continuous challenges, which are driven by factors like as global economic conditions and the need to maintain competitiveness while managing costs. It remains to be seen how these decisions will affect the larger labor market and employee morale in the sector.
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