After Rs 2.5 lakh per annum offer to freshers, Cognizant reportedly gives just 1% pay hike to staff

Cognizant has reportedly rolled out salary hikes ranging from 1% to 5% for some of its employees, following a four-month delay. The hikes come amidst an uproar over the company’s decade-low starting salary offers for fresh graduates.

The raises, based on performance ratings, have sparked further discussion, particularly as the highest increment was capped at 5%, according to a report in the Economic Times.

The report cited sources who said employees with a performance rating of three received a 1-3% increase, those with a rating of four saw a 4% hike, and those with a top rating of five were awarded increments up to 5%.

This is notably lower than the salary increases of 7-11% that Cognizant employees reportedly received in April 2023. Business Today was unable to verify this information independently.

The timing of these modest raises coincides with widespread criticism of Cognizant's off-campus hiring program, where the starting salary for fresh graduates was set at Rs 2.5 lakh per annum. This pay scale, unchanged since 2002, has become a focal point of debate on social media, especially given the current economic conditions.

Cognizant, which employs around 254,000 people in India—approximately 70% of its global workforce—also reported a reduction in its total headcount by 8,100 employees in the quarter ending June 2024. Despite these challenges, the company posted a 22.2% year-on-year increase in net profit for the second quarter, amounting to $566 million, along with a 3.6% sequential growth.

Amid the uproar over the low starting salaries, attention has also turned to Cognizant’s CEO, Ravi Kumar Singisetti, who is now reportedly the highest-paid IT CEO in India. In 2023, Singisetti earned $22.56 million (approximately Rs 186 crore), a compensation package that is 556 times the median salary of Cognizant employees. His earnings included a one-time stock award valued at $20.25 million, which significantly contributed to his total compensation.