cognizant jobcuts and cut in office space too! 3500 affected
The Nasdaq-listed IT major, which counts Accenture, TCS, and Infosys among its competitors, says its revenues will decline in 2023, highlighting the struggles in the IT services industry, which attracts most of its revenues from the US.
Cognizant’s margins, at 14.6%, are among the lowest in the IT industry, comparable to Tech Mahindra. Newly appointed CEO Ravi Kumar S currently faces a difficult task in reviving the company, which is listed in the US but has most of its operations in India.
According to Moneycontrol, out of over 355,000 employees across the globe, 258,500 were in India as of December 31. Calling Cognizant a well-known brand on college campuses in India, Kumar had recently revealed plans to continue capitalising on the country’s rich IT talent pool.
Kumar, who was initially supposed to join the IT major as President of Cognizant Americas, took over on January 12 as CEO. Former CEO Brian Humphries was involuntarily terminated without cause following the company’s multi-year underperformance, where it even saw alarming attrition levels.
When an executive is involuntarily terminated without cause, any misconduct or malfeasance isn’t blamed for the move, and they are also entitled to severance payment. For the transition, Humphries stayed on in the company till March 15.
Cognizant’s decision to lay off 3,500 employees has come after Accenture announced last month that 19,000 people would be let go to cut costs. The latter has also delayed the joining of several freshers for up to a period of one year.
Cognizant is expected to incur $200 million in employee severance and other expenses. To cut down on costs and address the present economic conditions, the company is also looking to reduce $100 million in real estate costs by 2025 as compared to last year.