Cognizant delays salary hikes, promotions by three months
IT firm Cognizant delays salary hikes and promotions for employees till October amid an uncertain business environment
New Delhi: US-based information technology (IT) firm Cognizant Technology Solutions has delayed salary hikes and promotions for employees till October amid an uncertain business environment.
In an email to employees, the company’s chief people officer Jim Lennox said the wage revision and promotions will come into effect from 1 October.
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Typically, IT companies in India hand out wage hikes from July.
A significant portion of Cognizant’s over 2.6 lakh workforce is based in India.
The move comes at a time when the $150 billion Indian IT exports industry is experiencing a slowdown in client spends and is staring at the possibility of tighter visa controls in key markets like the US. Incidentally, the US accounts for nearly 60% of the export revenues of Indian IT firms.
According to the email, Cognizant associates up to the level of manager will get hikes similar to the previous years, while senior managers and above will get a lumpsum amount, apart from their performance-linked bonuses.
When contacted, a Cognizant spokesperson declined to comment.
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Promotions for associates up to the level of vice president are expected to be announced in the coming weeks.
In May, Cognizant had extended a “voluntary separation incentive” to some of its top level executives offering up to nine months of salary. The company, which competes with Indian IT players like Tata Consultancy Services and Infosys, had posted a 4.3% decline in net profit to $1.55 billion in 2016.
After a stellar run over the last few years, the pace of growth seems to be slowing down for Cognizant. Its annual revenues stood at $13.49 billion, up by 8.6% over 2016, after slashing of growth forecast thrice during the year. However, it raised guidance for 2017, estimating revenue to be around $14.5-$14.84 billion.
There have also been reports of massive layoffs at some of the IT firms, although the companies maintain that only non-performers have been asked to leave, as part of an exercise conducted every year.
The gloom in the IT industry is reflected also in Nasscom projection for 2017. According to the apex industry body, software exports by Indian companies are projected to grow 7-8% in 2017-18.