Cognizant To Postpone Annual Salary Hikes

IT player Cognizant will be postponing its annual salary hikes by four months, with plans to implement them from 1 August, according to reports. This decision marks a departure from the previous year's schedule when the firm had provided hikes to its employees in April.

Cognizant stated that the merit increases for eligible associates would be awarded this year on 1 August. Majority of its associates have experienced four merit increases within three years, with the last cycle occurring on 1 April 2023.

Starting February, Cognizant has initiated a transition for its India-based employees to work from the office three times a week, signaling a shift in its operational strategy.

Headquartered in Teaneck, Cognizant has a global workforce exceeding 3,47,700 employees, with approximately 2,54,000 based in India.

This decision to delay salary hikes comes at a time when software services exporters and technology firms are grappling with subdued demand, as clients tighten their budgets amidst uncertain macroeconomic conditions.

In the fourth quarter of FY23, ending December, Cognizant experienced a 1.7 per cent year-on-year decline in revenue, reaching USD 4.76 billion, a likely eight-quarter low due to continued demand weakness. However, its profit rose by 7 per cent year-on-year to USD 558 million.

For the full year 2023, Cognizant recorded a marginal decline of 0.4 per cent year-on-year in revenue, amounting to USD 19.4 billion. In constant currency terms, the decline was even lower at 0.3 per cent.

Looking ahead to FY24, the company anticipates first-quarter revenue to range between USD 4.68 billion to USD 4.76 billion, reflecting a decline of 2.7 per cent to 1.2 per cent, or a decline of 3.0 per cent to 1.5 per cent in constant currency terms, according to projections by Cognizant.