Understanding the Factors Influencing IT Salaries

Tech salaries have taken a significant hit, dropping by as much as 30-40% from the lofty heights of about Rs 1 crore per annum that IT professionals were commanding just a year ago. This decline is attributed to a combination of global economic challenges and a slowdown in the IT sector, according to industry insiders.

The downward trend began several months ago, spurred by major tech companies looking to streamline their workforce. Venture capitalists, recruitment agencies, and executive search firms have observed a shift towards lower salary packages, signaling a new normal post the COVID-19 pandemic-induced hiring frenzy of 2021-22. Currently, much of the hiring activity is concentrated in early-stage startups post their series A funding rounds.

Ratna Gupta, a senior partner at ABC Consultants, an executive search and talent advisory firm, noted that many of those affected by recent layoffs are CXOs and senior tech professionals with experience in both large tech corporations and startups.

In the past year, several tech giants including Microsoft, Google, Amazon, and Meta have implemented large-scale layoffs. Nasscom's latest report forecasts a modest growth rate of 3.8% for the IT sector in 2023-24, a notable slowdown compared to the previous financial year's 8.1% growth.

Experts reveal that IT professionals are primarily experiencing reductions in their variable pay components, which typically make up around 30% of their total compensation. Despite the downturn, there's a silver lining for companies like IvyCap Ventures, whose founder Vikram Gupta sees an opportunity to hire top tech talent at more realistic salary levels.

Overall, IT leaders highlight a significant trend where startups are actively recruiting senior tech talent, taking advantage of the current softness in the global job market.

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Source: The Economic Times