Tech Mahindra has begun implementing company-wide salary increases starting January 2025, under the leadership of new CEO Mohit Joshi, in an effort to boost employee morale. This marks the first salary hike for senior executives in over 18 months, coinciding with government concerns about stagnant wages despite high corporate profits, which have negatively impacted consumer demand.
A senior Tech Mahindra executive, speaking anonymously, noted, “We have finally received a raise after one-and-a-half years. Since CP (Gurnani) left, none of the senior executives had received increases.” The average salary hike for most employees is around 7%, while top performers have seen increases of up to 12%.
Similar to other companies in the sector, Tech Mahindra had delayed annual pay raises for the second consecutive year as software service providers faced low demand and aimed to improve operating margins. Tata Consultancy Services was the first among the top five IT service firms in India to announce salary hikes, offering increments of 4.5-7% between April and June 2024, while Wipro provided raises of 4-8% starting in September of the previous year.
An analyst from a domestic brokerage indicated that the salary increases were necessary for employee retention, especially following the departure of several staff after Gurnani’s exit. “Joshi needed to focus on retaining talent, and his margin improvement strategy includes ensuring employee satisfaction,” the analyst stated.
The Economic Survey for 2024-25 highlighted that while corporate profits are at a 15-year high, real wages have remained stagnant, urging larger companies to align wage increases with profit growth to address income inequality and stimulate economic growth.
Tech Mahindra’s salary adjustments come at a time when peers like Infosys and HCL Technologies have also implemented significant wage hikes for their employees. Infosys, for instance, plans to roll out salary increases in two phases.
