When Accenture employees in Pune walked into their appraisal meetings in May, they expected the routine conversations. Instead, they found out things would be done differently this year.<br>They did get their full salary hike. But not the way it was done up until now. Half went into the base salary. The other half arrived as a lump sum in June. On paper, nothing was lost. In practice, though, every future raise now compounds on a smaller number. And that&#x27;s what affects gratuity, loan eligibility, and long-term salary growth. Even TCS has done something similar with bonuses.<br>Both are a consequence how the IT sector has been doing. It&#x27;s market value has fallen by nearly Rs 9 lakh crore in five years. Which means, its likely the restructuring has only just begun.<br>Tune in.<br>Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

IT jobs are being remade. Accenture and TCS are the first dominoes to fall

Daybreak

In mid-May, when the Accenture employees in Pune walked into a meeting with their managers, they may have expected the same old annual appraisal discussion. Instead, they were told that things would be done differently this year. The IT services giant has changed how it awards salary hikes for all its employees across the world, not just in Pune.

Instead of breaking up the full hike across their monthly salaries, Accenture is now splitting it into two parts. Half the hike will be added to the base salary, like before. The other half was paid as a lump sum on 30th June this year. An Accenture employee told my colleague, The Ken reporter, Debanjali Biswas, that if the employees would have been told about the change just two or three months in advance, they could have planned better and decided whether to stay or look for other jobs.

The thing is, on paper, this does look like a win, especially since the structure would mean that you get some quick cash in hand after years of frozen hikes. But most employees are still worried about what it means in the long term. Because here's the catch. Since only half the raise gets added to the base salary, each future raise is calculated on a smaller number. And that compounds and decreases the salary growth year after year.

Plus, base salary isn't just a number on a payslip. It determines things like gratuity, provident fund contributions, and even loan eligibility. Now, Accenture isn't alone in this kind of restructure. Even TCS recently shifted a part of its quarterly bonus to an annual payout instead, obviously making it much costlier for employees to quit mid-year.

IT jobs are being remade. Accenture and TCS are the first dominoes to fall

Read the full transcript

The candid version is on a podcast,
not the earnings call.

IT jobs are being remade. Accenture and TCS are the first dominoes to fall

Read the full transcript

The candid version is on a podcast, not the earnings call.

The candid version is on a podcast,
not the earnings call.