Cognizant raises staff pay; Wipro, Warburg eye Harman's biz

IT major Cognizant announced pay hikes for 80% of its staff. This and more in today's ETtech Top 5.

Also in the letter:
■ Oracle cuts staff
■ Myntra in festive mood
■ Apple bets on AI comeback

Programming note: ETtech Top 5 is off tomorrow. Wishing you all a Happy Independence Day!

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Cognizant has just announced salary hikes, albeit months later than usual. The IT services major said 80% of eligible employees will receive raises effective November 1, with top performers in India set for “high single-digit” increases.

Playing catch-up:

• Last year, hikes were delayed until August. This time, employees had to wait till November.
• The increments apply up to the Senior Associate level, varying by performance and geography.

The backdrop:

• TCS handed out raises earlier this month even as it cut 12,000 jobs.
• Infosys rolled out hikes in April but has stayed quiet on another cycle.
• Wipro is still in the evaluation stage, following last year's delayed increases (September).

By the numbers:

• Cognizant's Q2 FY25 revenue rose 8.1% year-on-year to $5.25 billion, with net profit up nearly 14%.
• Headcount stands at 343,800, of which 70% is based in India.
• The firm hired 7,500 freshers last quarter, and is targeting 15,000–20,000 freshers this year.

Zoom out: Cognizant's move reflects cautious optimism. The hikes and stronger fresher hiring contrast with peers' belt-tightening amid an uneven IT recovery.

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Wipro Technologies and private equity giant Warburg Pincus are in advanced negotiations to acquire Harman's India-based digital transformation unit for approximately $500 million (Rs 4,375 crore).

Driving the news: Harman, best recognised for its JBL speakers, also hosts a significant enterprise technology division. The acquisition focus is Harman's Digital Transformation Solutions (DTS) arm, which employs 9,000 staff and has a robust presence in healthcare, industrial, and communications sectors.

Why it matters: This is no ordinary carve-out. Harman DTS has been a close Wipro partner since entering India in 2008.

• For Wipro, buying out a key collaborator would strengthen its grip on regulated and connected tech sectors.
• For Warburg, it is a strategic re-entry into the outsourcing arena after its successful Encora exit.
• For Samsung, Harman's parent since a $8 billion buyout in 2017, this is about exiting a non-core vertical and sharpening Harman's focus on automotive.

Deal dynamics:

• Samsung has Deutsche Bank advising on the deal.
• Wipro has gone on an acquisition spree recently: Capco for $1.45 billion in 2021, Rizing for $540 million in 2022, and a clutch of niche US consultancies since.
• Warburg's deep ops expertise and India focus could help scale the business further.

Private equity and venture capital investors are rushing into India's electronics manufacturing sector, attracted by government incentives and increasing domestic demand.

On the hunt: Multiples, TA Associates, Apollo Global, Motilal Oswal and Reliance Capital are actively exploring investments in the EMS and component makers.

What's driving this?

• The government's electronics component manufacturing scheme (ECMS) has a September 30 deadline.
• Domestic giants like Dixon, Amber, and Zetwerk are expanding aggressively through joint ventures and qualified institutional placements.

Between the lines: Electronics has transformed from a “low-margin” afterthought to a strategic, capital-heavy industry with government support and potential for multibagger returns. EMS is emerging as the next significant investment – similar to how IT outsourcing was two decades ago.

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Oracle has cut over 150 jobs in its Seattle-based cloud division, citing performance reasons. But this may just be the start. More layoffs could follow in other regions, including India, as the company restructures for its next big bet: artificial intelligence.

Taking stock: At the same time, Oracle is hiring vigorously in Nashville, its new headquarters, even as it tightens its belt elsewhere. The company is reallocating resources, reducing legacy cloud roles to focus billions on AI infrastructure and new partnerships.

Broader trend:

• Microsoft has axed 15,000 roles this year despite record AI investments.
• Amazon slashed hundreds of jobs in AWS, and Intel plans to cut 5,500 jobs.
• Tech giants are redrawing workforce maps – scaling back conventional cloud, ramping up investments in AI and data centres.

Between the lines: Oracle's pivot highlights a tricky balance: chasing long-term AI gains while keeping short-term margins in check.

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Nandita Sinha, CEO, Myntra

Myntra is taking a bold swing at India's festive fashion rush. The Flipkart-owned platform is waiving commissions for select women's ethnicwear brands for three months, targeting the high-stakes August–October window that accounts for nearly half of all ecommerce fashion sales.

What brands get: Brands joining the programme pay no commissions but are charged a service fee for account management. In return, they gain access to M-Express for one- to two-day deliveries, premium placement across homepage and category slots, and visibility on Myntra's Glamstream live commerce platform.

Why it matters: Myntra aims to onboard 500 new ethnicwear labels in this window to capitalise on the surge in festive consumption. It is a savvy ploy to refresh inventory and cater to evolving trends at speed and scale.

Competitive play: Rivals are already moving. Meesho has long offered zero-commission selling, while Amazon India slashed seller fees across 59 categories last year.

Zoom out: With Flipkart preparing for Big Billion Days and Amazon and Meesho boosting seller incentives, Myntra's free-fee pitch is about capturing new brands and increasing wallet share during a buoyant festive period quarter.

• We reported on August 12 that analysts and brands expect a 15–20% bump in order volumes over last year, citing strong traction around Raksha Bandhan and Independence Day sales as early indicators.

Also Read: Quick commerce platforms see festive sales rise for Raksha Bandhan

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Apple is going all-in on AI-powered hardware, with a slate of new products set to hit home over the next two years, Bloomberg reported.

The roadmap:

• In 2026, it plans to launch a smart display running a new operating system called “Charismatic”, alongside AI-enhanced home security cameras
• By 2027, Apple aims to debut a tabletop robot, nicknamed the “Pixar Lamp”, featuring a lifelike, conversational Siri.

The details:

• The robot will track speakers with its camera (and swivel), respond to conversations, and offer intelligent suggestions.
• It will feature Siri's biggest overhaul yet—codenamed “Linwood” and “Glenwood”—powered by large language models.
• Apple shares surged 2% after the Bloomberg report revealed the pipeline.

Why it matters: Following the tepid response to Vision Pro and another ineffective year of iPhones, critics argue that Apple has lost its spark. These new launches seek to restore AI credibility by making Siri more helpful, more human, and central to everyday life.

The big picture: While rivals chase ChatGPT-like experiences, Apple's AI pivot focuses on home devices. This is a leaf out of Apple's familiar playbook: build hardware users can't live without, then lock them into the ecosystem.

Also Read: Apple's new ‘Answers' team set to build ChatGPT-style app