Business

IIE DIGITAL DESK : Cognizant has announced it will roll out salary hikes for approximately 80% of its eligible employees effective November 1, 2025, following a delay in its annual increment cycle. This marks a significant moment for staff morale amid a period of uncertainty in the IT services sector.

Typically beginning in August, this year’s salary revision was postponed by three months due to macroeconomic challenges, particularly tariff-related disruptions impacting client spending. CFO Jatin Dalal acknowledged these external pressures as the reason behind the deferment.

The merit-based increases will be applicable to employees up to the Senior Associate level, with the magnitude of each hike tied to both performance ratings and geographical location. In India, employees recognized as consistent top performers can expect high single-digit percentage increases, while the rest will receive proportionately smaller hikes.

Earlier in 2025, Cognizant also distributed the highest bonus payouts its associates have seen in three years, reinforcing its performance-linked compensation strategy.

This compensation rollout coincides with a strong second-quarter performance. Cognizant reported an 8.1% year-on-year revenue growth to $5.25 billion, and a 14% rise in net income to $645 million. The company also increased its annual revenue growth forecast to 4–6% and confirmed a stable adjusted operating margin of 15.5–15.7%.

The organization also expanded its workforce by approximately 7,500 new hires—mainly entry-level talent—raising its total headcount to 343,800. Plans are underway to recruit an additional 15,000 to 20,000 fresh graduates through 2025.

This hiring push is accompanied by significant investments in AI training, including a new learning facility in Chennai and broader reskilling initiatives.

Cognizant's action follows a pattern seen in other IT giants: TCS also delayed hikes while reaffirming merit-based compensation. Cognizant is distinguishing itself by rewarding top talent without resorting to layoffs, positioning itself as a more balanced and growth-oriented employer.

After a delayed increment cycle, Cognizant is awarding raises to 80% of eligible employees from November 1. These merit-based hikes reflect the firm's robust financial footing and strategic emphasis on talent retention and AI readiness. For top performers in India, the rewards come in the high single digits—a nod to performance-linked progression even amid industry headwinds.