Global IT services giant Cognizant Technology Solutions has decided to defer its annual salary hikes by four months this year, with plans to roll them out to eligible employees from August 1.
Last year, the Nasdaq-listed firm had provided hikes to employees in April. The delay in hikes comes amid a challenging macroeconomic environment and subdued demand in the software services industry.
Impact of Delayed Hikes Amidst Subdued Demand
The decision to defer salary hikes comes at a time when software services exporters and technology firms are facing subdued demand, with clients tightening their budgets due to uncertain economic conditions.
For the fourth quarter of FY23 ending December, Cognizant reported a 1.7% year-on-year decline in revenue to $4.76 billion, marking a likely eight-quarter low. Despite the revenue decline, the company’s profit rose 7% year-on-year to $558 million.
However, for the full year 2023, Cognizant posted a 0.4% year-on-year decline in revenue to $19.4 billion. The company’s first-quarter revenue for FY24 is expected to be between $4.68 billion and $4.76 billion, reflecting a decline of 2.7% to 1.2%, or a decline of 3.0% to 1.5% in constant currency terms.
