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Wipro onsite staff get 3 p.c. hike, 8 if offshore

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CIOL Bureau
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BANGALORE, INDIA: Whether or not Wipro Limited gave a hike to its employees and if so, how much was it? It was the big question doing its rounds for more than a month since June.

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Now, the answer is official. Those employees who are eligible for a hike have been given an average wage increase of 8 per cent, if they are offshore, and 3 per cent, if onsite.

"As for the salary increase, we rolled out this month, as we normally do," said Pratik Kumar, executive vice-president, Human Resources, Wipro Limited, at the first quarter 2012 results announcement in Bangalore on Tuesday.

The staff members, who are entitled to the wage hikes based on their performances and subject to other relevant parameters, have been receiving their Merit Salary Increase (MSI) letters from the company since early this month.

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The hikes basically depend on employee skillsets, experience, performance, grade, vertical and BU, apart from the assessment by their L1 and L2 managers, and be effective June 1, 2012.

About the mid-term appraisals, Kumar said that they do have one at the end of six months of a financial year. At this juncture, the third largest IT exporter in India has rolled out its first round of promotions. Wipro's gross utilization for the quarter is 68.3 per cent, as against 69.7 per cent in the corresponding period last year.

"The utilization should be in the same region in next few quarters and in case there is a dip, it is because of recruits from campus joining us, for whom the training period is longer," explained Kumar.

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Also read: Wipro hike roll-out to be complete next week

The company, whose IT Services unit accounts for about 78 per cent of its revenues, also makes soaps, deodorants, lighting and hydraulics equipment. It would continue with hiring local talent, which is around 38 per cent of its onsite headcount, in its foreign offices.

Earlier in the day, Wipro gave a muted forecast for its main IT services business, as global spending on outsourcing services has shrunk, pushing Wipro's shares down to a nine-month low. The company said on Tuesday it expects the second quarter IT services revenues to be 1.52 billion to $1.55 billion, a rise of 0.3 to 2.3 per cent from the June quarter.

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It saw an 18 per cent increase in net profit to Rs. 1,508 crore in the first quarter of 2012-2013, compared with the previous year. In line with their guidance, the company posted a revenue of Rs. 10,653 crore, an increase of 24 per cent from the previous year.

"In today's complex business environment, global corporations are increasingly investing in transformational technology initiatives to improve competitiveness. We see this shift as an opportunity for us to lead this change and help customers differentiate in this fast evolving market," stated Premji, chairman of Wipro.

At the conference, T.K. Kurien, executive director & chief executive officer, IT Business, said, "We have delivered revenues in line with our guidance in a volatile environment. We will continue to build differentiation and invest in technology driven business transformations for our customers as well as rewarding our talent."

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"We have seen high levels of volatility in currencies globally. We have improved profitability, while continuing to invest for growth," Suresh Senapaty, executive director & chief financial officer of Wipro said.

In fact, analysts were expecting Wipro to forecast a 2-4 per cent increase.

Dipen Shah, head of Private Client Group, Research, Kotak Securities, said, "Wipro's results were below expectations. The volume growth of about 0.8 per cent came in line with the guidance, but was lower than peers. EBIDTA margins also disappointed. The guidance for 2Q also reflects the macro uncertainty and the limited revenue visibility for the company."

"Wipro has been restructuring its business and this, along with the uncertain demand scenario, has impacted revenue growth. The performance will improve in line with the improvement in the macro scene," he added.

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