Helper At A Local Stall Can Earn More Than What Cognizant Is Offering To Engineering Graduates Despite Record Profits And Its CEO Being The Highest Paid In India

Cognizant, an IT giant, has recently posted a job vacancy for 2024 engineering graduates, which has sparked a social media debate about worker exploitation.

The company has received flak online for offering just ₹2.52 LPA to engineering freshers in its “exciting” off-campus mass placement drive.

₹2.52 LPA comes out to be ₹21,000 per month. After Deducting PF and mediclaim (if provided) the net pay to be around ₹18,000.

The minimum wages for a graduate and above is Rs 21,756 per month for Delhi. 

While every city has a different benchmark, it is just cruel to subject an engineer to a situation where they are scraping the bottom of the barrel.

Cognizant’s offices are located in metro cities. Working in a metro city as a single bachelor away from home means bearing expenses of minimum ₹20,000 to sustain a basic lifestyle. God forbid someone gets an emergency expense.

A person from a lower middle-class background cannot even think about supporting his parents. He might not be able to support himself in the first place. 

While it is not unusual to see educated graduates being offered bare minimum salaries in this country, the fact that a multi-national corporation is doing it too, where many dream of working, raises many concerns about the work culture here.

Without formal education, you can earn more than this

Internet users were quick to point out how people in blue-collar jobs, which historically pay less than MNC jobs, earn more than this.

An ad at a local momo shop for helper at INR 3 LPA. There would be no deductions either. Getting INR 25,000, all in hand – without the liability of education loan or worrying about ROI on education.

This Comes After Cognizant Registered 22% higher Profits Last Quarter

For the second quarter ending in June 2024, Cognizant reported a 22.2% year-on-year (YoY) increase in net profit, which reached $566 million. The net profit increased by 3.6% sequentially from $546 million in the previous quarter.

The Nasdaq-listed technology major’s revenue was at the higher end of its guided range, at $4.85 billion. This figure was almost flat or marginally lower by 0.7% YoY compared to $4.89 billion in the same quarter previous year, and 1.9% higher quarter-on-quarter (QoQ) than $4.76 billion in the March quarter.

Cognizant anticipates that its revenue for the third quarter will be within the $4.89 to $4.96 billion range (this is towards the higher end), with the majority of its revenue originating from customers in North America and Europe.

Its CEO Ravi Singisetti is among the Highest paid CEOs; Earned ₹186 Crore in 2023

In January 2023, Ravi Kumar Singisetti, 52, assumed the role of CEO at Cognizant. The one-time stock award, which was valued at $20.25 million (approximately ₹169.1 crore), constituted a substantial portion of his compensation last year.

Kumar’s remuneration is 556 times the average salary of Cognizant employees, making it the fourth highest in the industry, following Wipro and Accenture.

Kumar emerges as the leader in the Indian IT services sector when CEO compensation is calculated as a percentage of the company’s revenue.

Kumar’s compensation comprises 0.11% of Cognizant’s $19.35 billion revenue from the previous year. Comparing it with major companies to put it into perspective:

Thierry Delaporte, the former CEO of Wipro Ltd who resigned from his position in April 2024, received $10.1 million (₹83 crore) last year, which accounted for 0.089% of the company’s $11.16 billion in revenue. 
Similarly, C. Vijayakumar’s anticipated remuneration of $10.65 million (₹88 crore) represents 0.085% of HCL Technologies Ltd’s $12.58 billion in revenue.

Julie Sweet, the chair and CEO of Accenture Plc, received $31.55 million in compensation despite the fact that the company is more than three times the size of Cognizant, making it equivalent to 0.049% of Accenture’s $64.1 billion revenue.

Salil Parekh’s compensation of $6.8 million ( ₹56.4 crore) represents 0.037% of Infosys’s $18.1 billion revenue. Tata Consultancy Services Ltd. paid $3.5 million ( ₹29.16 crore) or 0.012% of its $27.9 billion in revenue as salary to its former CEO, Rajesh Gopinathan, who K. Krithivasan succeeded in June of last year.

Unfortunately, this is not unique to Cognizant; IT Giants in India Haven’t Increased Their Pay in years for Junior-Level Positions

People have noted that the company was offering the same amount to junior-level employees 20 years back too. In 20 years, they have not revised it at all.

Moreover, the appraisals at the company are nothing short of a joke. Even someone who has got 5/5 rating is eligible for just a 4.5% hike, as noted by a Twitter user who posted the following image:

Entry-level salaries at Infosys, Wipro, and other IT companies have not changed in the last ten years.

A recent social media post that emphasized the stagnant salaries at Tata Consultancy Services (TCS) has sparked a pervasive online discussion.

The problem is not limited to TCS.

Similar stagnant salaries were reported by numerous technical professionals at other significant IT organizations.

“In 2013, my salary at IBM was also Rs 21,000.” One individual stated, “It appears that not much has changed over the years.”

Additionally, salaries at organizations such as Wipro and Tech Mahindra have remained constant. “In 2006, I began my employment at Tech Mahindra, where I received an annual salary of ₹3.0 lakh. I am taken aback by the fact that salaries have not changed significantly in nearly 18 years”.

Employees of India’s top three IT companies with only generic skills are seeing salary hikes fall to single-digit percentages of 5-9% in the financial year 2023-24 after a two-year period of double-digit growth.

Infosys, which is known for having the highest annual increments among its peers, saw its average increments drop to 9% compared to 9.9% in the previous year and 14.6% during the year before that.

For TCS, the average hike was between 7-9% in 2023-24 compared to 10.5% in 2021-22. Wipro saw a 9.4% median hike compared to the previous year. Tech Mahindra and HCLTech had average hikes between 5-7%.

This is owed to the increasing availability of entry-level talent.

The entry-level salaries have remained at Rs 3.5-4 LPA for over a decade.

A few people have remarked that INR 2.52 LPA is still decent as various companies (especially small enterprises) pay this or lower even today. Moreover, anyone who is placed at such a low package would not necessarily have the best skills or potential.

Unfortunately, it is true. Despite the trolling and criticism, the placement drive would go on as it is. The information on the number of applicants who applied for this could not be extracted, but seeing the widespread layoffs, no appraisal or bonuses, and dry promotions – all in the economy with high inflation and uncertainty, many candidates would apply for the job.

The psyche is:

• Getting a brand name like Cognizant on the CV
• Rather than sitting idly, it is better to find something that pays something (something is better than nothing)
• Waiting for the economy to improve to find a higher-paying job

Last month, these two incidents made headlines:

• More than 25,000 job seekers thronged a venue in Mumbai where Air India Airport Services was set to conduct walk-in interviews on July 16. There were only 2,216 vacancies on offer, and the massive crowding almost led to a stampede-like situation.
• A stampede-like situation occurred in Ankleshwar in Gujarat’s Bharuch district when around 800 persons turned up for walk-in interviews held by a firm for 40 vacancies. Hundreds of job aspirants queued up for the interview at a hotel.

Clearly, people are desperate for jobs. It is always easier to blame the public for not being “employable” enough for good companies to hire them at good pay. 

However, we need to remind ourselves that it is not on the common public, most of them coming from families with meager pay, to learn how to become employable. 

It is an institutional failure, a system that thrives from exploiting the ones in need to benefit the already privileged section. If the fundamental educational institutions are not preparing the candidates for the job market, it is not the candidates who are at fault.