Cognizant, one of India’s leading IT services firms, has yet to finalize its decision on salary hikes for employees in 2025.
Despite earlier indications that merit-based pay increases would begin in August, the company has now stated that no firm timeline has been set.
The uncertainty stems from ongoing macroeconomic challenges and a cautious demand outlook across the global technology sector.
During its Q2 earnings call, Chief Financial Officer Jatin Dalal acknowledged the ambiguity, saying, “Given the macro environment at play and the uncertainty around it, we have not yet taken a decision on salary increase.
He added, “Our endeavour is to cover a vast majority of our employees during the second half of this year as and when we decide”.
Cognizant Previous Commitments and Revised Expectations
Earlier this year, Cognizant had assured employees that salary hikes would follow the August cycle, consistent with the previous year’s schedule.
In March 2025, the company issued bonus payouts for 2024, with eligible employees receiving between 85% and 115% of their target bonuses—reportedly the highest in three years.
At the time, Cognizant stated that the August hike would mark the fifth merit increase in four years for most associates.
However, the recent shift in tone suggests that the company is reevaluating its compensation strategy in light of broader industry trends and economic headwinds.
Industry-Wide Caution on Compensation
Cognizant’s cautious approach mirrors that of other major IT firms.
Wipro, for instance, has deferred its decision on salary hikes until it can better assess market conditions.
TCS, which recently announced the termination of 12,000 employees, has indefinitely postponed its hike plans.
Among Tier-I IT players, Infosys remains the only firm to have implemented wage increases in FY26 so far.
The Indian IT industry is grappling with multiple challenges, including geopolitical tensions, trade uncertainties, and reduced discretionary spending by clients in key markets such as the United States and Europe.
A recent announcement by U.S. President Donald Trump regarding 25% tariffs on Indian goods and penalties related to Russian imports has further clouded the outlook.
Hiring Continues Despite Uncertainty
Despite the ambiguity around salary hikes, Cognizant continues to expand its workforce.
In Q2 2025, the company added 7,500 employees, bringing its total headcount to 343,800 as of June 30.
CEO Ravi Kumar S confirmed that the company remains committed to hiring 15,000 to 20,000 freshers this year, with a focus on building capabilities in artificial intelligence and emerging technologies.
To support this initiative, Cognizant is setting up a 21-acre learning campus in Chennai, aimed at training both freshers and lateral hires in advanced AI skills.
Cognizant Employee Sentiment and Future Outlook
While the delay in salary hikes may cause concern among employees, Cognizant’s continued investment in hiring and skilling suggests a long-term commitment to workforce development.
Attrition rose to 15.2%, up from 13.6% in the previous quarter, reflecting broader trends across the sector.
The company’s leadership has emphasized that any decision on compensation will balance employee investment with business sustainability.
As the second half of the year unfolds, employees and analysts alike will be watching closely for updates on the hike timeline.
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