Cognizant Likely To Lay Off 7,000 Mid-To-Senior Employees To Cut Costs
IT services firm Cognizant, which is struggling to get its feet back on the growth curve, announced its third-quarter results. The firm saw a mere 4.2 percent growth to US$ 4.25 billion over the year-ago quarter. The operating margins slipped to 15.7 per cent against 18.3 per cent in the third quarter of the last year.
In an analyst call, the company’s management announced that the firm will be cutting jobs to boost revenue. The company will focus more on investment in sales and try to uplift the digital growth.
The company’s Cheif Executive Officer – Brian Humphries chalked out a ‘2020 Fit for Growth Plan’ which will run for two years. As a part of this plan, the company will remove 10,000 to 12,000 mid-to-senior level employees from their current roles. He said that 12,000 was the gross reduction number, and the net reduction would scale somewhere between 5,000 to 7,000 roles as the company will re-skill 5,000 associates to decrease the impact.
These figures also exclude another 6,000 jobs that will have a direct impact as the company is exiting a subset of its content operation business. The 5,000 to 7,000 employees will be let go by mid-2020. The company with the layoffs is eyeing to save somewhere between US$ 500 million in 2021 and record restructuring charges worth US$150-200 million by the end of the next year.
As of September 2019 Cognizant employed 2,89,900 employees, up marginally from 2,88,200 in June 2019.
The Cognizant’s decision holds significant importance for Indians as it is the second-largest IT employer after TCS. Last month, Brian said that around two lakh employees were working for Cognizant in India.
The company has also identified a series of investments that require funding. The IT firm will hire 500 revenue-generating employees over the coming year. It will also invest in Cognizant Academy, its internal learning organisation to re-skill and redeploy talent towards digital work.
Cognizant is also focusing extensively on data, digital engineering, cloud, and Internet of Things (IoT) to grow digitally.