Since the last two days, the internet has been abuzz with information about impending salary hikes in the IT behemoth, Infosys. So is it true? The good news is yes. Salary hikes have indeed been announced in Infosys during the conference call following the announcement of the company's Q3 results.

As per the information given by Jayesh Sanghrajka, Chief Financial Officer, Infosys, the company will implement annual salary hikes of 6-8%, starting January 2025.

In other words, this marks the company’s first phase of planned salary revisions, with the second phase set to follow in April.

The move also comes as the tech industry navigates a challenging global economic environment.

Salary Hikes and Fresh Hiring Plans

During Infosys’ Q3 FY25 results press conference, Jayesh Sanghrajka, Chief Financial Officer, reaffirmed the company’s commitment to the two-phase salary hike plan. Speaking to the media, Sanghrajka said, “We had announced earlier that compensation hikes will happen in two phases—one phase from January 1 and the other from April 1. We are on track with that.”

He further elaborated on the quantum of the hikes, stating, “Broadly, the compensation hike that we are expecting is 6% to 8% in India, and the overseas compensation will be in line with the earlier compensation reviews.”

Infosys is also ramping up its fresher hiring, planning to onboard over 15,000 fresh graduates in FY25. This number is expected to rise to 20,000+ in FY26, reflecting the company’s long-term growth ambitions despite current market uncertainties.

A Notable Shift in Infosys’ Compensation Strategy

Historically, Infosys has rolled out annual salary hikes in June, effective from July. However, the process was paused in 2024, making the upcoming hike even more significant for employees. The decision underscores the company’s focus on employee retention and motivation, especially as it aims to maintain its competitive edge in the global IT services market.

IT Industry Trends and Competitive Landscape

It needs to be mentioned that throughout last year, annual salary hikes in the IT sector were anticipated by experts.

Tata Consultancy Services (TCS), India’s largest IT company, set the tone earlier last year by announcing double-digit hikes for top performers. Starting April 2024, TCS awarded exceptional employees with increments between 4.5% and 7%, while top performers received double-digit raises. TCS also said that it planned to hire 40,000 freshers in 2024, reinforcing its commitment to talent growth.

Similarly, Wipro implemented salary hikes in September 2024, offering top performers an average increase of 8%, an improvement from the previous year’s 6%. Most offshore employees benefited from the revised structure. Wipro’s announcement came amid concerns over reduced IT spending globally, a trend impacting the broader technology sector.

In that sense then, the hikes in Infosys have been anticipated for a while now. Talking to Fortune India, Harpreet Singh Saluja, lawyer and president of the IT employee organisation, Nascent Information Technology Employees Senate (NITES), says that the salary hikes in Infosys were being expected by the employees for good seven-eight months now.

“They should have come up with the hikes last year itself. In that way, these hikes have been anticipated for a while now. But as they say, it is never too late than never,” he said.

IT Sector: Is the Worst Behind?

The December quarter (Q3FY25) results of Indian IT majors TCS, Infosys, HCL Tech, and Wipro were a mixed bag but offered few surprises, hinting that the sector may have weathered its most challenging phase. While it might still be early to declare a full recovery, industry experts remain cautiously optimistic about the trajectory of Indian IT after these results.

TCS, the bellwether of the IT sector, reported strong total contract value (TCV) growth, expressing confidence in its long-term growth outlook. Infosys continued its upward momentum by revising its FY25 revenue growth guidance for the third consecutive quarter, now at 4.5–5% in constant currency (CC) terms. HCL Tech posted healthy deal bookings of $2.1 billion, with wins spanning services and software, while Wipro's Q3 performance aligned broadly with market expectations.

For the quarter, consolidated revenue from operations of these IT giants reflected resilience, with TCS leading the charge at ₹63,973 crore, a 5.6% year-on-year (YoY) growth. Its CC revenue rose by 4.5%, while profit attributable to shareholders surged 12% YoY to ₹12,380 crore.

TCS CEO and MD K Krithivasan highlighted the robust TCV performance across industries, geographies, and service lines, providing solid visibility for sustained growth. Similarly, Infosys CEO and MD Salil Parekh underlined the company’s increasing focus on enterprise AI, especially generative AI, which has driven significant client traction. Infosys also reported another quarter of strong large deal wins, bolstering its confidence for the future.

HCL Tech’s steady $2.1 billion in new deal bookings underscored its ability to capitalise on demand across its portfolio, while Wipro maintained stability amid expectations of gradual recovery in the IT space.

As the sector continues to adapt to changing client needs and economic uncertainties, the Q3FY25 performance signals cautious optimism. With the focus shifting to enterprise AI, digital transformation, and expanding deal pipelines, the Indian IT sector appears poised for long-term growth, though challenges remain in a volatile global environment.

Therefore, the salary hikes at Infosys come at a time when the IT sector faces headwinds, including a global slowdown and reduced client spending. Although, the situation, as evidenced through these quarterly earnings, may not as bad as it has been for the past two years. Despite these challenges, one must note that Infosys’ decision to roll out competitive hikes and hire aggressively signals confidence in its growth trajectory.