Cognizant has deferred its annual salary hikes for a significant portion of its workforce, delaying the much-anticipated Cognizant salary hike to the second half of 2025. Traditionally rolled out during the second quarter, the appraisal cycle remains pending this year—a move confirmed by Chief Financial Officer Jatin Dalal during the company’s Q2 FY25 earnings call.
“We have not concluded the cycle. It will be done, if at all, in H2,” Dalal stated, signaling uncertainty around the timing and extent of the Cognizant salary hike. While top-performing employees have received performance-linked adjustments, the majority of staff members are still awaiting clarity on their compensation revisions.
The delay underscores the IT services giant’s cautious approach to spending amid ongoing market volatility. The decision comes at a time when tech companies are treading carefully on employee-related expenditures in response to subdued client demand and changing project priorities.
Revenue Dip Triggers Conservative Cost Strategy
Cognizant reported a 1.4% year-on-year decline in Q2 revenue, bringing in $4.75 billion, though it saw a modest sequential uptick of 0.6%. Despite beating street estimates, the numbers reflect persistent challenges in discretionary spending by global clients, especially in digital transformation and consulting engagements.
The company emphasized a sharpened focus on improving operating margins and maintaining cost discipline. “We continue to evaluate the appropriate timing for compensation changes while remaining competitive in attracting and retaining talent,” said Dalal. This signals that while cost optimization is a priority, the company remains mindful of its positioning in a competitive talent landscape.
Analysts view this move as part of a broader trend across the IT sector. Several large firms are holding off on salary hikes or promotions this year, aligning workforce spending with revenue visibility and client sentiment. Cognizant’s internal push for productivity improvements and delivery efficiency is being prioritized over immediate compensation increases.
Employee Morale and Industry Outlook in Focus
The deferred Cognizant salary hike have sparked unease among employees, especially amid rising living costs and concerns over job stability in the tech sector. While Cognizant has assured that the majority of employees will be covered in the upcoming cycle, the lack of a firm timeline has added to the ambiguity.
Industry observers caution that such deferrals, if prolonged, may impact employee morale and talent retention. “Companies must balance cost controls with clear communication and growth opportunities to avoid attrition spikes,” said a senior HR consultant familiar with IT compensation trends.
At a macro level, the move reflects the broader recalibration underway in the technology sector—one where companies are prioritizing resilience, margin stability, and long-term sustainability over short-term compensation commitments.
Cognizant’s next quarterly results and market performance will likely determine the fate of the pending Cognizant salary hike. Until then, the company is expected to maintain a measured stance, aligning workforce decisions with evolving business realities.
