The hikes are as low as 1% and the highest is said to be 5%, at least two people aware of the development told ET on the condition of anonymity.
“For a rating of 3, the hike is around 1-3% while a 4 rating has been granted a 4% hike and a 5 rating to an employee is paid an increment of around 4.5% and at the most 5%,” one of the persons said.
Last year, the Nasdaq-listed company had granted salary hikes to its employees in April, ranging from approximately 7% to 11%.
The development of meagre salary hikes comes at a time when Cognizant is widely criticised for offering decadal-low starting salaries of Rs 2.52 lakh per annum, or around Rs 21,000 a month, to freshers through its off-campus recruitment drive starting Wednesday. The measly salary offer has created a stir across social media platforms.
Cognizant did not respond to two separate requests for comment on the hikes and the latest hiring drive till press time Wednesday.
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The New Jersey-headquartered company has around 254,000 employees, or about 70% of its total headcount, in India.It reported a reduction in its total headcount by 8,100 to 336,300 during the quarter ended June. The employee count was lower by 9,300 from a year ago.
Despite being one of India’s large outsourcing firms with a global presence, industry experts suggest that Cognizant has regressed the latest salary package to 2002 levels, a move that has drawn sharp reactions, especially in light of the muted economic climate.
In its second quarter ended June, Cognizant posted a 22.2% year-on-year (YoY) and 3.6% sequential growth in net profit at $566 million. Its revenue came in at $4.85 billion, marginally lower by 0.7% on year.
The company has guided for Q3 revenue to be in the range of $4.89-4.96 billion, a minus 0.2% to +1.3% YoY or 0.0% and 1.5% YoY in constant currency terms.
In February, Cognizant had also initiated a policy for its employees in India to work from the office three times a week.
The latest low hikes and salary offerings coincides with a subdued growth and demand environment in the $250-million software services exporting industry as clients are tightening their discretionary spending budgets due to continued macroeconomic strain globally.
For 2023, Cognizant had awarded its annual hikes in ‘two-merit cycles’ in a year, a one-time measure that it adopted to tame high attrition, which came down to 13.6% for June quarter from 19.9% a year earlier.
