Accenture’s weak 1QFY24 guidance pushes out hopes of a second half recovery for India IT Services players, JM Financial Institutional Securities said in its report last month….reports Asian Lite News
Global IT services firm Accenture is reportedly skipping pay hikes for its employees and reducing promotions at senior positions in India and Sri Lanka. Accenture said on Thursday it considers a variety of factors, including the macroeconomic environment, in making its decisions around pay and benefits.
A MoneyControl report, citing an email sent by country managing director Ajay Vij to employees, said that Accenture “will not be paying out hikes to its employees in India and Sri Lanka in 2023 except where it is legally mandated or where it has committed to it in critical skill areas”.
“Given the context of our performance, we will not be providing any stay-at-level (base pay) increases this year except where legally mandated or committed in a few critical skill areas,” he wrote in the email.
Vij said the company “experienced a macro environment that was more challenging than anticipated at the beginning of the FY23 fiscal year”.
“We are postponing our promotions to and within MD, and appointments to SMD, until June 2024 in order to allow ourselves to return to growth so that promotions are affordable”, Vij said in the email.
In a statement to IANS, Accenture said its “rewards philosophy is to provide market relevant pay based on the skills and locations where we operate”.
“We also consider a variety of factors, including the macroeconomic environment in making our decisions around pay and benefits,” the company added.
Accenture has more than 3 lakh employees in India.
Accenture’s weak 1QFY24 guidance pushes out hopes of a second half recovery for India IT Services players, JM Financial Institutional Securities said in its report last month.
Besides, a modest implied growth rate through 2HFY24 for Accenture risks India IT Services players’ FY25 revenue growth estimates as well. This, we believe, is an incremental negative, the report said.
“Given Accenture’s full year guidance is a first peek into potential growth trajectory for FY25, we see its underwhelming guidance as an incremental negative for the sector,” said the report.
“We continue to believe that the unwinding of excess IT spend could keep incremental revenue growth muted through FY24. If Accenture’s commentary is anything to go by, FY25 growth expectations could be at risk as well”, the report noted.
Meanwhile, the hiring index for IT-software/services has declined (year-on-year) in all nine months of this year, reflecting continued softness in demand and uncertainty in the overall environment, according to Emkay Global Financial Services.
IT job index is currently down 49 per cent from its peak levels in July 2022.
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