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Cognizant to hike salaries in August, marking the second year of such a delay: Report
After its new CEO Ravi Kumar took office, bonuses are given in March while hikes are given in August, when hikes used to be given in March as well earlier.
Cognizant Technology Solutions Corp will be giving annual salary hikes to employees from August this year, marking the second time it has delayed salary increases by at least five months.
Meanwhile, bonuses to eligible employees will be rolled out in March, according to a Mint report.
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The Teaneck, New Jersey-based company usually gives hikes and bonuses around March, but after its new CEO Ravi Kumar took office, bonuses are given in March while hikes are given in August.
However, Cognizant in a statement to HT.com, said “We remain steadfast in our commitment to recognizing the hard work and dedication of our associates through merit increases and bonuses.”
“As part of this ongoing commitment, merit increases for eligible associates will be awarded in August, exactly one year after the prior cycle. In fact, with the August 2025 cycle, the majority of our associates will have received five merit increases within the past four years.”
The company added that “there has been no delay in the merit cycle, and any claims to the contrary are incorrect” and that it is also “pleased to be paying bonus to eligible associates mid-March, ensuring that its talented teams are consistently recognized for their contributions.”
The company gave hikes in the range of 1-5% last year. However, the early announcement this year is to possibly control attrition, according to the report.
Attrition, or people leaving the company, rose to 15.9% at the end of 2024 from 13.8% a year back. This was in the tech services arm.
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This attrition figure is higher than competitors such as Tata Consultancy Services Ltd, Infosys Ltd, and HCL Technologies Ltd, which reported attrition of 13%, 13.7%, and 13.2%, respectively, the report read.
However, TCS and Infosys includes IT services attrition in this figure while HCLTech excludes the digital process automation wing.
One reason for Cognizant's higher attrition rate is Kumar’s policy of going after redundancies. More specifically, Cognizant announced it would sack 3,500 employees and close 45% of its Indian office spaces in 2023, just four months after he joined.
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Meanwhile, TCS was the only large IT company to roll out increments on time, awarding employees hikes of 4.5-7% in the April-June 2024 period, according to the report.
This is all because “the Indian IT industry is holding its breath and taking a defensive position," the report quoted Peter Bendor-Samuel, founder of Everest Group, a Dallas-based IT research firm as saying.
“Going into the year, it looked like the market had hit bottom, and we were set for a recovery. However, the uncertainty created by the new US administration is spooking the market. Clients are holding off on planned projects, and many in the industry fear we are sliding back into the delay and cancel environment we have been experiencing for the last two years," he added.
