After months of speculation and internal uncertainty, IT services giant Cognizant has officially announced that salary hikes for a majority of its workforce will be implemented starting November 1, 2025. The decision comes after a three-month delay from the originally expected August rollout, and follows similar moves by industry peers like TCS and Infosys.
This announcement marks a significant moment for Cognizant’s global employee base, especially in India, where the company has a substantial footprint and where top performers are expected to receive the most generous increases.
Key developments and timeline:
1. Cognizant had initially committed in March 2025 to begin salary hikes in August
2. Due to macroeconomic headwinds and internal restructuring, the hike was postponed
3. On August 14, Cognizant confirmed that 80 percent of eligible employees will receive merit-based salary increases effective November 1
Who’s getting the raise:
- The hikes will apply to employees up to and including the Senior Associate level
- The remaining 20 percent, typically comprising senior leadership and C-suite executives, will be evaluated separately based on business unit and company performance
- In India, consistent top performers can expect pay increases in the high single digits
- The exact percentage of the hike will vary depending on individual performance ratings and geographic location
Performance-based structure:
- Cognizant emphasized that the raises are merit-driven, aligning with its second-quarter earnings guidance
- Employees who have consistently delivered high performance will be prioritized
- The company has not disclosed specific figures for onsite employees or those in senior roles
Context and industry comparison:
- Cognizant’s announcement follows TCS’s decision to implement salary hikes from September 1, which were originally due in April
- Infosys has also rolled out its compensation revisions, leaving Wipro as the last major IT player yet to announce its hike schedule
- The delay in Cognizant’s hike cycle reflects broader industry challenges, including global economic slowdown, geopolitical tensions, and tariff-related uncertainties
Financial health and hiring trends:
- Cognizant reported strong Q2 earnings with revenue of USD 5.25 billion, marking an 8.1 percent year-on-year increase
- Net income rose 14 percent to USD 645 million, and bookings surged 18 percent, including two deals worth over USD 1 billion each
- The company added 7,500 employees in Q2, bringing its total headcount to 343,800
- It plans to onboard 15,000 to 20,000 freshers in 2025, with a strong focus on AI upskilling and hybrid workforce development
AI and future workforce strategy:
- Cognizant has committed USD 1 billion to AI initiatives, including infrastructure development and client-specific solutions
- The company is partnering with Google to train 200,000 employees in AI technologies
- A new learning facility in Chennai will support reskilling efforts, preparing employees for a future where human and digital agents collaborate
Employee sentiment and bonus history:
- Earlier this year, Cognizant awarded most associates their highest bonuses in three years, ranging from 85 to 115 percent
- The bonus cycle remained intact in March, even as salary hikes were deferred
- The latest announcement is expected to boost morale and reduce attrition, which had dropped to 15.2 percent in Q2
Conclusion:
Cognizant’s decision to implement salary hikes after a prolonged delay signals a renewed commitment to employee welfare and performance recognition. With the IT sector navigating turbulent waters, this move could set a precedent for balancing fiscal prudence with talent retention.
Sources: Business Standard, CNBC-TV18, NDTV, India Today, BusinessWorld, MSN
