Accenture Halts Salary Hikes for India, Sri Lanka Employees in 2023

Accenture, a prominent IT consulting firm, has informed its employees in India and Sri Lanka that there will be no salary increases for the fiscal year 2023 due to challenging macroeconomic conditions. In an email from the country’s managing director, Ajay Vij, it was stated that employees may still receive individual annual performance bonuses, although these bonuses will be significantly lower than in previous years, reflecting the company’s underperformance. This decision coincides with broader industry challenges, including macroeconomic headwinds and reduced client spending.

Vij explained in the email, “As outlined in our FY23 results, we faced a more difficult macroeconomic environment than expected at the start of the fiscal year, resulting in lower growth and necessitating tough choices regarding promotions and rewards.” Additionally, promotions for senior management roles will be postponed until June 2024. Vij further clarified, “Considering our performance context, we will not be granting base pay increases this year, except where legally required or in select critical skill areas.”

While Accenture provided a sales growth guidance of 2-5% for FY24, the company reported a 16% year-on-year decline in net income for the quarter ending in August. This decision aligns with the challenges faced by major players in the Indian IT industry, who have cited an uncertain demand environment. Promotions are scheduled to be awarded in December, up to Level 5 employees, although they will be less generous compared to the previous year.

Accenture, estimated to employ over 300,000 people in these countries, follows a rewards philosophy that considers market-relevant pay based on skills and geographic locations, taking into account various factors, including the macroeconomic landscape, when making compensation and benefits decisions, according to a spokesperson responding to ET queries.