Tech Mahindra to Roll Out Salary Hikes From Q2 in Phased Manner
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Tech Mahindra will begin implementing employee salary hikes from the second quarter (Q2) of FY27 in a phased manner, signalling improving business confidence as the IT services company reported easing employee attrition alongside a decline in headcount during the quarter ended June 30, 2026.
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Speaking during the company’s post-earnings conference call, Chief Executive Officer and Managing Director Mohit Joshi said the wage revision process would commence in the July-September quarter.
We expect to be able to announce it effective Q2, obviously in a phased fashion. It will start becoming effective Q2 in a phased Manner,” Joshi said, adding that employees would be informed in the coming days.
The announcement comes at a time when India’s IT industry is gradually resuming salary revisions after a prolonged period of cautious spending driven by macroeconomic uncertainty, weaker discretionary technology spending, and slower hiring.
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Q1 Profit Misses Estimates Despite Revenue Growth
Tech Mahindra reported a consolidated net profit of ₹1,465 crore for the quarter ended June 30, an 8.2% sequential increase from ₹1,354 crore in the previous quarter. However, the figure fell short of analysts’ consensus estimate of ₹1,607 crore.
The company posted revenue from operations of ₹15,712 crore, up 4.2% quarter-on-quarter, broadly in line with market expectations of ₹15,422 crore. Operating margins also improved sequentially, reflecting continued execution of the company’s turnaround strategy and operational efficiency initiatives.
While profitability remained below expectations, the company maintained its focus on improving margins and strengthening business performance amid an evolving demand environment.
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Attrition Declines, Headcount Continues to Fall
Tech Mahindra’s latest workforce metrics indicate improving employee retention, although the company continued to streamline its workforce during the quarter.
Key workforce highlights:
- Attrition declined to 11.8% in Q1 FY27 from 12.1% in the previous quarter.
- Compared with the same quarter last year, attrition improved from 12.6%, indicating stronger employee retention.
- Overall headcount decreased by 688 employees during the quarter to 146,760.
- The company’s IT workforce fell below the 75,000 mark, ending the quarter at 74,689, compared to 75,377 on March 31, 2026.
- On a year-on-year basis, the IT employee base declined by 5,298 employees, from 79,987 to 74,689.
- In the Business Process Services (BPS) segment, headcount reduced by 250 employees, from 64,330 to 64,080.
- The Sales and Support function recorded a marginal increase in employee strength, rising from 7,916 to 7,991.
The improving attrition rate suggests greater workforce stability, while the continued decline in headcount reflects Tech Mahindra’s ongoing focus on productivity, automation, and cost optimisation.
Salary Hikes Signal Growing Confidence
The decision to roll out salary hikes, albeit in phases, is expected to provide a morale boost for employees after a period during which several IT companies deferred or staggered compensation revisions.
Although Tech Mahindra has not disclosed the percentage of the salary increase or the employee categories that will be covered initially, the phased implementation suggests the company is balancing employee rewards with financial discipline.
The move also reflects growing confidence in the company’s business outlook as it continues its transformation under CEO Mohit Joshi, focusing on operational excellence, profitable growth, and strategic investments.
Industry Outlook
Tech Mahindra’s announcement is likely to be closely watched across India’s IT services industry, where companies have adopted conservative compensation strategies over the past year amid global economic uncertainty.
As client spending gradually stabilises and attrition moderates across the sector, phased salary hikes could become an increasingly common approach among technology firms seeking to retain talent while maintaining cost efficiency.
For employees, the announcement signals renewed optimism, even as the company continues to reshape its workforce and navigate a cautious recovery in the global technology services market.
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About the Author
Sheetal Singh
Contributing Writer