Cognizant has become the latest IT giant to delay employee salary hikes, citing an uncertain macroeconomic environment. This shift, confirmed by CFO Jatin Dalal during a recent earnings call, marks a continued departure from the company’s traditional March hike cycle, now twice deferred under CEO Ravi Kumar’s leadership.
While bonuses were paid in March as usual, the timeline for salary increments—originally expected in August—has now been left undecided, with a vague assurance that a “vast majority” of employees may be covered in the second half of 2025. Last year’s hikes ranged between 1–5%, and the current delay reflects growing cost consciousness in the face of volatile global demand.
Industry-Wide Hiring Freeze and Hike Deferrals
Cognizant’s decision follows similar moves by Wipro, which has postponed its decision on hikes until demand stabilizes, and TCS, which has deferred hikes indefinitely after laying off 12,000 employees globally due to “skill mismatch.”
This trend underscores the broader challenges confronting Indian IT firms—sluggish demand, geopolitical instability, and economic unpredictability, including fresh headwinds from retaliatory tariffs announced by US President Trump.
Hiring Still On, But Cautiously
Interestingly, Cognizant continues to add new talent, with 7,500 new hires in Q2, bringing its global headcount to 343,800. The company remains committed to hiring 15,000–20,000 freshers in 2025 from Indian colleges, emphasizing AI-assisted onboarding to enhance productivity even among new joiners.
However, this influx of fresh talent may be a cost-optimization strategy, as fresher salaries are significantly lower than those of mid- and senior-level employees. Attrition has also risen to 15.2%, suggesting internal dissatisfaction amidst uncertainty over raises and job security.
Key Takeaway
Cognizant’s deferment of salary hikes is part of a larger, industry-wide recalibration, as IT companies brace for weaker demand, rising costs, and pressure to maintain margins. While freshers continue to be hired, the industry’s pivot toward leaner structures and AI integration could mean prolonged wage stagnation, heavier workloads, and fewer opportunities for career growth in the short term.
This evolving scenario raises an important question: Can the Indian IT sector balance cost control with talent retention in the age of AI and economic turbulence?
