Cognizant defers salary hikes to August in a second such delay in last 5 months

Cognizant Technology Solutions Corp. has once again postponed the salary hikes and will implement them in August of this year. This is the second time the company has postponed salary hikes in over five months.

During a town hall at the company’s newly renovated Kolkata office on Thursday, Cognizant CEO S Ravi Kumar announced that salary hikes would begin on August 1, while bonuses for eligible employees would be distributed in March, the report stated. 

“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. There has been no delay in the merit cycle, and any claims to the contrary are incorrect,” a statement from the company said.

The company also instructed managers to communicate bonus details to their teams by March 11.

Normally, Cognizant distributes both hikes and bonuses in March, but under CEO Ravi Kumar’s leadership, bonuses are paid in March while hikes are deferred to August. The company’s last salary increases, ranging from 1% to 5%, were given in August of the previous year.

The early announcement of the salary hike this year may be an effort to address rising attrition rates. In the tech services division, which represents the majority of the workforce, voluntary attrition climbed to 15.9% by the end of 2024, up from 13.8% the previous year, Mint reported. Attrition refers to employees voluntarily leaving the company.

As of December 2024, Cognizant’s voluntary attrition rate surpassed that of competitors like Tata Consultancy Services Ltd (13%), Infosys Ltd (13.7%) and HCL Technologies Ltd (13.2%) in the past 12 months.

The report stated that TCS and Infosys’ figures include attrition in their IT services arms, while HCLTech’s data excludes digital process automation.