Tough times: Cognizant defers salary hikes, promotions by three months

IT major informed its employees that salary revisions and promotions would be effective from October 1. This process usually gets over by July.

Company News : Cognizant Technology Solutions (CTS) has pushed back promotions and salary hikes by three months due to slow growth and rising business costs.

The software services major informed its employees that any salary revisions and promotions would be effective from October 1, people in the know told Business Standard. This process usually gets over by July.

The company has 2,61,200 employees across the world.

The company's chief people officer, Jim Lennox, in a note to the staff said employees up to the manager level would receive “a percentage increase in their basic pay like previous years, while people at senior manager and above level would get a “lump sum” amount. This apart, they will get performance-linked bonuses.

For employees up to the level of vice president, according to the note, the new salaries would be effective from October 1. A Cognizant spokesperson declined to comment.

Some of the former and existing employees of the company said a delay in appraisal clearly hints at tough times for the IT industry and a large chunk of mid-level employees also fear job losses on account of slow growth and technology disruption.

This comes at a time when the company, like its peers such as Infosys, TCS others, reduced H1B visa applications and ramped up local hiring in their largest market in the US. This will certainly result in initial cost pressure, said analysts.

56,000 IT jobs in danger? Infosys, TCS say they're not responsible for mess

According to reports, the 7 biggest IT firms operating in India are set to let go of 56,000 workers

In his social media post, an anonymous techie called the recent spate of layoffs in the information technology (IT) sector a "nightmare". The bad news is, the nightmare is unlikely to end anytime soon.

The seven biggest IT companies operating in India, including Wipro, Infosys, Tech Mahindra and Cognizant, are planning to layoff at least 56,000 engineers this year, Livemint reported on Thursday.

According to the report, this projected number is double the amount of layoffs by these companies last year. Mint claims the astoundingly high number was arrived at after "extensive interviews with 22 current and former employees across these seven companies".

The companies concerned are Infosys, Wipro, Tech Mahindra, HCL Technologies, US-based Cognizant Technology Solutions, DXC Technology, and France-based Cap Gemini SA. According to the report, they have denied that the mass layoffs signal a crisis and have attributed the increased layoffs to more rigorous appraisal processes.

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Of course, the news of IT majors handing out pink slips has already been flowing in. On Wednesday, Tech Mahindra let go of around 1,000 of its employees. Tech Mahindra's layoffs, however, were not an outlier; Wipro fired around 500 of its employees in April, and Cognizant has signalled it could let go of close to 10,000 of its employees. (Read more)

However, Infosys has said that it does not plan to cut jobs.

Aside from the Mint report, earlier reports had also suggested Infosys was planning to hand out pink slips to hundreds of its employees at its bi-annual performance review.

According to an Economic Times report, Infosys Chief Operating Officer U B Pravin Rao has said, "I would like to put to rest any speculation around planned layoffs. As has been the case in the past, we will primarily see some performance-based exits." (more)

More job cuts in India? Cognizant to expand local hiring in US

Firm to prune domestic costs through initiatives such as voluntary separation

Cognizant Technology Solutions plans to sharply increase local hiring in the US this year with increased demand for co-innovation and on-site presence from clients. The Nasdaq-listed technology services major said it would look at talent across local community colleges to big management universities to man different projects in the US.

Last month, when the United States Citizenship and Immigration Services opened the window for applications, Cognizant applied for "less than half" H1B visas compared with last year.

"We are evolving our workforce and delivery in the United States. Cognizant hired 4,000 US citizens in 2016, and in 2017 and beyond, we expect to significantly ramp up our US based workforce by hiring experienced professionals in the open market and by making more use of university programmes. We are shifting our workforce largely in response to clients' increasing need for co-innovation. But we still seek visas for highly-specialised and skilled talent...We expect to further reduce our need for these visas going forward. As part of our shift, we continue to expand our US delivery centres," Rajeev Mehta, President, Cognizant told analysts on Friday.

At the same time, the company has taken up initiatives such as the voluntary separation package, which was announced last week, for senior employees to optimise costs.

"We are looking for opportunities to further optimise cost structures...We just launched earlier this week a voluntary separation package that programme will go till the end of Q2 and we will see the benefit of that in Q3," said Karen McLoughlin, chief financial officer, Cognizant. Read more