Cognizant, one of the leading global IT services firms, has announced a delay in salary hikes until August 2025, leaving thousands of employees uncertain about their financial future. Traditionally, the company disburses annual salary hikes in March, but for the second consecutive year, the raises have been postponed.
This decision has sparked concerns among employees, especially amid rising inflation and increasing living costs. While Cognizant has assured that bonuses will be paid on time, the delay in salary hikes has led to speculation about the company’s financial health, attrition rates, and industry trends.
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Why is Cognizant Delaying Salary Hikes?
1. Financial Pressures & Market Conditions
Cognizant has been facing financial challenges, including tepid organic revenue growth and operating margin pressures. The company’s leadership has stated that the delay in salary hikes is a strategic decision to align compensation structures with its financial performance.
🔹 According to reports, Cognizant’s revenue growth has been slower than its competitors, with demand fluctuations in key verticals like healthcare and financial services.
🔹 Operating margins have also been under pressure, prompting the company to rethink cost-cutting measures before implementing salary increases.
🔹 Reduced hiring rates indicate that the company is focusing on internal restructuring rather than expansion.
2. High Attrition Rates Compared to Competitors
Cognizant’s voluntary attrition rate stood at 15.9% at the end of 2024, which is higher than competitors like:
- TCS – 13%
- Infosys – 13.7%
- HCL Tech – 13.2%
Why Does This Matter?
- Employees leaving at a higher rate puts pressure on hiring and retention strategies.
- Delaying salary hikes could further increase employee dissatisfaction and attrition.
- The company may risk losing top talent to competitors offering better compensation structures.
Expert Insight: Some analysts believe delaying salary hikes could be counterproductive, as high attrition could lead to higher recruitment and training costs in the long run.
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3. CEO’s Explanation & Employee Concerns
During a recent town hall meeting, Cognizant CEO Ravi Kumar addressed concerns about the delay, emphasizing:
- The decision was made to align pay increases with long-term financial goals.
- The company remains committed to honoring salary hikes in August 2025.
- Bonus payouts will proceed as scheduled in March, reassuring employees of Cognizant’s commitment to compensation.
Employee Reactions:
- Many employees expressed frustration, citing rising inflation and financial planning concerns.
- Some worry that delayed salary hikes may signal deeper financial instability.
- Others are considering job switches to companies that provide more stable and predictable salary hikes.
How Will This Affect Cognizant Employees?
Short-Term Impact:
- Employees will have to wait longer for salary increases, which may affect financial planning and morale.
- There is a possibility of higher attrition, especially among those looking for immediate salary hikes.
- Uncertainty about financial stability could reduce employee trust in the company’s leadership.
- Promotions and career growth opportunities may be affected, as salary increases are tied to performance appraisals.
Long-Term Impact:
- If Cognizant successfully recovers financial margins, employees may see better hikes in August.
- Market adjustments could lead to higher retention incentives, depending on business growth.
- Employees may seek better-paying opportunities elsewhere, affecting Cognizant’s talent pool.
What Can Employees Do?
- Stay updated on official company announcements regarding salary hikes.
- Consider alternative job opportunities if financial security is a concern.
- Plan financially for the delay, ensuring stability until August.
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(FAQs)
1. Why is Cognizant delaying salary hikes?
Cognizant has stated that the delay is due to financial performance and market conditions, ensuring that salary hikes align with long-term company goals.
2. When will Cognizant employees receive salary hikes?
Salary hikes will be implemented in August 2025, instead of March 2025, which was the usual practice.
3. Will Cognizant still pay bonuses?
Yes, bonuses will be distributed in March 2025, as per the company’s standard policy.
4. How does Cognizant’s attrition rate compare to competitors?
Cognizant’s 15.9% attrition rate is higher than competitors like TCS (13%), Infosys (13.7%), and HCL Tech (13.2%), raising concerns about employee retention.
