Despite the once-in-a-century pandemic, Indian IT is doing so well that the largest firm in the sector has announced not one, but two, salary hikes within six months.
On March 19, Mumbai-based Tata Consultancy Services (TCS) said it will give its employees an average increment of between 6-8% to its over 470,000 employees effective April 1, cumulatively raising wages by 12-14% in the last six months.
Besides the higher-than-usual percentage change in under a year, the announcement means the company has moved back to its usual annual increment cycle, which had been delayed last year as TCS gave its annual hikes in October 2020. The cycle had been disrupted because TCS, like most businesses across the world, faced challenges during the early months of the pandemic outbreak. These challenges not only delayed increments but also led to a series of layoffs at some Indian IT companies.
But the sector recovered fast as Indian IT fulfilled a critical role during the Covid-19 pandemic, by keeping the world’s largest healthcare and financial institutions up-and-running.
“We can confirm that we are on track to give increments to all associates across our geographies effective April 2021, in line with our benchmarks,” a TCS spokesperson said. “We are extremely thankful to all our associates for demonstrating resilience, adaptability, and an innovative mindset to steer the company in these trying times. This step is a reflection of our steadfast commitment to our associates.”
TCS’s blip and rise amid Covid-19
In April-June 2020, when India was under lockdown just like many other parts of the world, TCS saw its business suffer. The company’s revenue fell 6.3% year-on-year during the quarter.
However, along with most players in the Indian IT sector, TCS bounced back quickly as its revenue from life science and healthcare clients continued to grow.
The same trend was visible in terms of the geographic breakup for TCS’s revenues.
During April-June 2020, the industry bellwether saw demand plummet across most geographies, including North America, which accounts for nearly 70% of the Indian IT sector’s revenues. But all the regions recovered by the end of 2020.
In fact, its October-December 2020 quarter results were its strongest in nine years as its net income grew 3.7% y-o-y.
CEO and managing director Rajesh Gopinathan attributed the solid performance to “growing demand for core transformation services and strong revenue conversion from earlier deals.”
Besides TCS, IT consulting firm Accenture announced a one-time bonus equivalent to one week of base pay for its employees on March 18. Competitor Cognizant promoted 24,000 employees globally and rolled out performance-based wage hikes for 160,000 workers.