- Cognizant’s 2024 salary increments range from 1% to 5%, significantly lower than last year’s 7% to 11%.
- The company delayed salary hikes by four months this year, contributing to employee dissatisfaction.
- Despite low increments, Cognizant posted a 22.2% YoY net profit growth in Q2 2024, while revenue slightly declined.
Cognizant, a major IT services company, has rolled out annual salary increments as low as 1% this year, sparking discontent among employees.
The increments vary based on performance ratings, with 3-rated employees receiving hikes between 1% and 3%, and top-rated employees getting a maximum of 5%. This represents a stark contrast to last year when increments ranged from 7% to 11%, and were distributed earlier in April.
Cognizant Faces Backlash Over Minimal Salary Hikes Amid Strong Profit Growth
The timing of these modest salary increases coincides with Cognizant’s report of a 22.2% year-on-year net profit growth in Q2 2024, reaching $566 million. However, the company also saw a slight revenue decline of 0.7%, bringing in $4.85 billion. With the majority of its 254,000-strong workforce based in India, the company’s cost-cutting measures, including these minimal raises, have been met with criticism.
These reduced increments come after a four-month delay, adding to the dissatisfaction. Last year, Cognizant employees received their raises in April, but this year, the increments were postponed, further frustrating the workforce. The timing of these decisions has raised questions, especially since the company reported significant profit growth during the same period.
Cognizant’s Q2 2024 financial report showed a 22.2% increase in net profits, reaching $566 million, despite a slight decline in revenue. This growth underscores the company’s ability to maintain profitability even as it implements cost-saving measures, such as reducing salary increments. However, the disconnect between profit growth and employee compensation has led to growing discontent within the company.
The bulk of Cognizant’s employees are based in India, where the company has historically offered competitive packages. However, the recent reductions in salary increments have sparked debates about the sustainability of this approach, particularly as the IT sector faces increased competition for top talent. With a significant portion of its workforce affected, Cognizant’s strategy will likely be closely scrutinized in the coming months.
Cognizant’s decision to reduce salary increments despite robust profit growth raises questions about employee morale and retention, especially in an increasingly competitive IT landscape.
“Employees will always work harder when they feel valued, and fair compensation is a key part of that feeling.”
