Infosys Restarts Appraisals, Announces 6-8% Salary Hikes for Indian Employees

Infosys, India’s second-largest IT services firm, has resumed its annual appraisal process, bringing salary increments for its employees in India. The increments, ranging between 6-8%, will roll out in two phases: January 1, 2025, and April 1, 2025.

Impact on Margins

Jayesh Sanghrajka, Chief Financial Officer of Infosys, stated that the salary increases are expected to impact the company’s margins in the fourth quarter of FY25 and the first quarter of FY26. Despite the expected financial strain, the company remains committed to rewarding its workforce.

Delayed Appraisal Cycle for 2024

The appraisal cycle for 2024 covered the period from September 2022 to October 2023, with ratings provided to eligible employees in December 2023. Typically, increments are effective from July, following the issuance of appraisal letters in June. However, the process faced delays in 2024, and the last salary revision became effective on November 1, 2023.

Infosys Returns to Standard Appraisal Practices

In FY22, Infosys temporarily paused salary hikes as a cash conservation strategy. The annual appraisal cycle resumed in October 2023, with salary revision letters issued in December. This marks a return to normalcy in the company's employee compensation process.

Headcount and Performance Update

In the October-December 2024 quarter, Infosys added 5,591 employees, bringing its total headcount to 323,379 as of September 2024. The company demonstrated a strong performance by reporting a net profit of ₹6,806 crore for the December quarter of FY25, surpassing market expectations of ₹6,753 crore. This represents a sequential growth of 4.6%, reflecting steady business amid ongoing industry challenges.

Looking Ahead

The resumption of appraisals and salary hikes highlights Infosys' efforts to maintain employee satisfaction while navigating economic pressures. By balancing workforce rewards with operational efficiency, the company aims to sustain its competitive edge in the IT sector.

Conclusion

The resumption of salary hikes by Infosys marks a significant milestone in the company's commitment to employee welfare and operational excellence. Despite the anticipated impact on margins in FY25 and FY26, Infosys has prioritized rewarding its workforce, reflecting its long-term vision for growth and employee satisfaction. The phased rollout of increments demonstrates the company’s strategic approach to balancing financial challenges with employee retention and morale. With steady profit growth and expanding headcount, Infosys continues to reinforce its position as a leading player in the IT sector, setting an example for resilience and adaptability in a competitive industry landscape.