Cognizant Technology Solutions Corp., based in Teaneck, New Jersey, has announced that it will implement annual salary increases for its employees starting in August this year. This marks the second consecutive year that the company has postponed salary hikes by at least five months. During a town hall meeting at the newly renovated Kolkata office, CEO S. Ravi Kumar confirmed that while bonuses will be distributed in March, salary increases will take effect on August 1. An internal memo indicated that bonuses will be communicated to employees the week of March 10, with managers expected to relay this information to their teams by March 11.
Traditionally, Cognizant has provided both salary hikes and bonuses in March, but under Kumar’s leadership, bonuses are now awarded in March, with salary increases following in August. The last salary adjustments, ranging from 1% to 5%, occurred in August of the previous year. Kumar’s early announcement of this year’s salary hike may be a strategy to mitigate rising attrition rates. By the end of 2024, voluntary attrition in the tech services division, which constitutes the majority of the workforce, increased to 15.9%, up from 13.8% the previous year. Cognizant’s attrition rate surpasses that of competitors such as Tata Consultancy Services, Infosys, and HCL Technologies, which reported rates of 13%, 13.7%, and 13.2%, respectively, over the last year.
Since taking the helm, Kumar has been focused on revitalizing Cognizant’s performance. The company experienced a decline in full-year revenue in 2023, but in 2024, revenue grew by 1.98% to $19.74 billion, largely driven by acquisitions. Cognizant’s fourth-quarter earnings report highlighted that its recent acquisitions of Belcan and Thirdera contributed 200 basis points, or 2%, to its revenue growth in 2024. This suggests that the core business, excluding acquisitions, faced a decline last year. Cognizant acquired Belcan in September 2024 for $1.3 billion to enhance its capabilities in the engineering research and development sector, and Thirdera was acquired in January for $430 million.
