Cognizant Technology Solutions, a major player in the IT services industry, has come under scrutiny for its recent handling of employee salary hikes. According to reports, the company has rolled out annual salary increases as low as 1% for some employees, with the highest hikes reaching just 5%. This development has been met with widespread criticism, particularly given the current economic climate and rising inflation rates.
Cognizant CEO: Ravi Kumar Singisetti had received Rs 186 crore salary last year.
Deferred Increments Add to Employee Frustrations
In addition to the minimal salary increases, Cognizant also deferred these increments by four months, further exacerbating employee concerns. The increments, initially expected earlier in the year, were delayed, with the company finally implementing them at much lower rates than anticipated. For employees rated with a performance score of 3, the salary increase ranged between 1-3%. Those with a rating of 4 received a 4% hike, while top performers with a rating of 5 were granted increments of only up to 5%.
This is a stark contrast to the previous year, where Cognizant provided salary hikes ranging from 7% to 11%. The significant reduction in salary increments has fueled discontent among employees, particularly as the company also faces criticism for offering starting salaries as low as ₹2.52 lakh per annum to freshers in its off-campus recruitment drive.
A Struggling Workforce Amidst Corporate Gains
Cognizant’s recent actions have raised questions about its financial management and employee welfare strategies. Despite the low salary hikes and headcount reduction, the company reported a 22.2% year-on-year increase in net profit, amounting to $566 million for the quarter ending in June 2024. The company’s total headcount decreased by 8,100, bringing the number of employees down to 336,300, with about 70% of them based in India.
The decision to offer minimal salary hikes and delay increments has sparked concerns about employee morale and retention. As the company navigates these challenges, it remains to be seen how Cognizant will address the growing dissatisfaction among its workforce. The situation underscores the broader tensions in the tech industry, where companies are balancing profitability with the need to maintain a motivated and satisfied workforce.
