Cognizant undecided on salary hikes, plans rollout for most by year-end

Facing global uncertainty, Cognizant delays salary hike decision and targets second-half rollout while continuing to hire freshers and expand AI-driven roles

Cognizant has joined a growing list of IT services companies by stating it has not yet decided on the timeline for employee salary hikes, citing continued uncertainty in the business environment.

 

“Given the macro environment at play and the uncertainty around it, we have not yet taken a decision on salary increase. Our endeavour is to cover a vast majority of our employees during the second half of this year as and when we decide. This decision was made with a long-term view that considers both investment in our people and the future of our business,” chief financial officer Jatin Dalal told Business Standard during an earnings conference call.

 

The company had earlier assured, in March, that hikes would begin from August, following last year’s schedule. Traditionally, Cognizant issued hikes and bonuses in March. However, since Ravi Kumar became the chief executive, bonuses have continued to be paid in March while hikes have been deferred to August. Last year, the company offered hikes ranging from 1–5 per cent.

 

Peers defer hikes as demand outlook weakens 

Wipro, which implemented hikes from September 1 last year, also said earlier this month that it would decide on salary increases after assessing the demand scenario. TCS, which recently announced the termination of 12,000 employees, has indefinitely deferred hikes for this year. 

 

The demand environment remains volatile, and the Indian IT industry is also facing fresh headwinds following US President Donald Trump’s announcement of retaliatory tariffs on Wednesday, further clouding the outlook.

 

Hiring of freshers on track despite challenges 

Despite the uncertainty, Cognizant added 7,500 employees during the second quarter, bringing its total headcount to 343,800 as of June 30. The company continues to hire engineering graduates from Indian colleges.

 

“We have taken freshers and will continue to take them for the rest of the year. Our target is about 15,000–20,000 and we are on track to do that,” said Kumar, adding that freshers can perform more tasks with the help of artificial intelligence.

 

Attrition at Cognizant rose to 15.2 per cent from 13.6 per cent sequentially, mirroring the upward trend observed across other major IT companies.