Cognizant draws flak for '1% salary hike' despite significant profit boost: Report

According to an Economic Times report, the global tech giant implemented salary hikes as low as 1%, with the highest being 5%, following a four-month delay in rolling out increments.

Employees rated 3 in performance received raises between 1% and 3%, while those rated 4 and 5 saw increases ranging from 4% to 5%.

This is a sharp drop from last year’s hikes of 7-11%.

The controversy intensified as Cognizant announced starting salaries of Rs 2.52 lakh per annum for fresh graduates—a figure reminiscent of entry-level pay in 2002—prompting outrage on social media.

This move has raised concerns about the company's ability to attract new talent in the future. Cognizant clarified that this package applies to candidates from the 2024 batch holding any 3-year full-time degree.

Despite these issues, Cognizant, which employs 254,000 people in India, posted a 22.2% year-on-year profit growth in the second quarter, reaching $566 million.

However, its revenue fell slightly by 0.7% year-on-year to $4.85 billion.

The company reduced its total headcount by 8,100 in the last quarter and now employs 336,300 people globally, down by 9,300 from the previous year.

Looking ahead, Cognizant has projected Q3 revenues between $4.89 and $4.96 billion, representing a slight growth range of -0.2% to +1.3%.