## IT Giants Grapple with Rising Wage Costs Despite Slowing Revenue Growth
India's top IT firms, Tata Consultancy Services (TCS), Infosys, and Wipro, faced a significant increase in wage costs during the 2023-24 financial year (FY24), despite experiencing a slowdown in revenue growth. This trend highlights the challenges these companies face in balancing talent acquisition and retention with profitability.
The Economic Times reports that the combined wage cost surge for these three companies amounted to Rs 18,036 crore in FY24, exceeding a 5.5% increase compared to the previous year. This rise is attributed to ongoing lateral hiring in high-demand sectors like artificial intelligence (AI), machine learning (ML), cloud, and engineering services.
A Closer Look
TCS, with its massive workforce of over 600,000 employees, witnessed a 9.5% year-on-year increase in its wage bill. Infosys and Wipro saw more moderate increases of 5% and 2.4%, respectively. While TCS and Wipro managed to improve their operating margins, Infosys experienced a slight decrease.
Salary Hikes and Attrition Rates
TCS has announced salary increments ranging from 4.5% to 7%, with higher raises for top performers. Infosys and Wipro are yet to disclose their figures for appraisals and fresh hiring. Attrition rates for all three companies have decreased compared to the previous year, indicating some stabilization in the talent market.
Headcount Reduction and Employee Benefit Expenses
Despite the wage cost increase, all three companies experienced a record drop in headcount during FY24. TCS witnessed a decrease of 13,249 employees, Infosys lost 25,994 employees, and Wipro saw a reduction of 24,516 employees. However, employee benefit expenses for all three companies still increased, highlighting the rising cost of talent acquisition and retention.
Conclusion
The rising wage costs faced by TCS, Infosys, and Wipro reflect the ongoing challenges in the IT industry. Balancing talent acquisition and retention with profitability remains a key concern for these companies as they navigate a changing market landscape.