In an exclusive interview with ET, his first since taking over in December 2023, he said the company’s performance in the last quarter, when it closed five major deals If the value exceeds $100 million each, larger deals can be expected, especially high-value contracts.
“We can gain market share and customer accounts where we are investing, it’s probably too early to say we are turning the tide because the (U.S. economic) data is mixed, but overall if you look at performance, the numbers are certainly improving. This was the second consecutive quarter where we beat the upper end of our forecasts,” Dalal said.
He joined Cognizant from Wiprowhere he served for 21 years.
Speaking of the Recent controversy over low wages at entry levelsDalal said it was a “misunderstanding” and that the company pays engineers salaries ranging from “Rs 4 lakhs to Rs 12 lakhs” for different types of work and universities. “This salary of Rs 2.5 lakhs, I want to make it clear, does not reflect the salary of an engineer. That is for a three-year university course at an entry level… So, these are two very different parallel recruitment streams,” he said.
He said the job posting was not corroborated with facts as quickly as it should have been. “And I think that’s a challenge of social media,” he said.
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Commenting on the recent salary hikes, Dalal said, “Cognizant is giving salary hikes to 290,000 associates globally. To date, Cognizant is one of the few IT services companies in India to have given salary hikes to employees in 2024. Earlier this year, Cognizant paid the bonuses in March on time. Cognizant has promoted over 125,000 associates from 2022 till the end of July 2024, which is 40% of the Indian workforce in this time period.” Refuting claims about fresher salary stagnation for over a decade, he said, “I think we can actually corroborate that fresher salaries have increased over the years, but in some ways, they have increased at a slower pace.”
Dalal said one must consider the breadth of opportunities and growth that the IT industry offers to young people. “In five years you could be in London and in another five years you could be in Seattle or Australia or wherever you want,” he said. “If you look at it, the top leaders in this industry started out as engineers, and I can give you several names from our company who started out as engineers and have become great leaders in the company. So that’s the overall package.”
Cognizant Technology Services, which is larger than Information systems In terms of annual revenue, the company hit a rough patch a few years ago under former CEO Brian Humphries. In 2023, he hired Ravi Kumar S. from Infosys as CEO to turn the company around. Dalal is one of the most prominent leaders to join Kumar’s leadership team at Cognizant.
Speaking about the progress of the ongoing turnaround at the company, Dalal said that from a sequential growth perspective, Cognizant moved from negative growth two quarters ago to stable growth in the first quarter of this fiscal and then saw strong positive sequential growth of 2.1% in the June quarter.
Cognizant follows a January-December financial calendar. The US-based IT firm had provided an adjusted operating margin guidance of 15.3-15.5% for 2024, representing a year-on-year expansion of 20-40 basis points.
A basis point is one hundredth of a percentage point.
On margins, Dalal said: “We have given guidance for this year, which says we are going to be 20 to 40 basis points better than last year. So, we are already on an improvement trajectory.”
Speaking about Cognizant’s aspiration to become the largest employer in some of India’s second-tier cities, Dalal said the company’s incremental growth is coming from the second-tier cities. “So, five years from now we would look at a different footprint than we would have in the metropolises, and that doesn’t mean that metropolises will shrink. I think metropolises will continue to be what they are (a major source of talent), the flow of talent in general, and as I always say, one stream cannot make a river, so it takes multiple streams to make a river,” he said.
The company recently announced new facilities in Bhubaneswar, Indore and Hyderabad.
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