Cognizant is the second largest IT employer in India with over 2 lakh employees based in the country.

Cognizant to lay off nearly 7000 employees as it looks to cut costs
Money IT Thursday, October 31, 2019 - 13:02

Global IT major Cognizant Technology Solutions (CTS) will be removing 10,000 to 12,000 mid-to-senior level associates from their current roles. This was announced by Brian Humphries, CEO of Cognizant in its earning call with analysts on Thursday. Of the 10,000-12,000 that will be removed, the company aims to reskill around 5,000 associates and redeploy them. This will result in around 5,000-7,000 employees eventually losing their jobs in the coming quarters.

This, Brian said, is part of the company’s cost reduction plan. “This gross reduction is expected to lead to net reduction of 5,000-7,000 roles as we aim to reskill 5000 associates, thereby lessening the impact on our associates and allowing us to reduce lateral hiring,” he said in the earnings call.

This holds significance as a majority of Cognizant’s employees are based in India. In September, Brian announced that CTS has over two lakh employees in India. This makes it the second largest IT employer after TCS, which has over four lakh employees in the country.

The cost reduction plan also involves exiting certain content work in the digital operations practice over the course of 2020. This will be the work that is done within the company’s digital operations service line. Exiting this business, the CEO says, will impact approximately 6,000 roles worldwide. However, Cognizant will work with its partners to move these employees to alternate vendors, to reduce the impact.

As part of its content moderation business, Cognizant worked with clients such as social media giant Facebook. The company has been under fire for the impact the high-pressure job of content moderation for Facebook was having on the mental health of Cognizant’s employees. As per a Verge report, it allegedly led to the death of an employee.

For the third quarter ended September, Cognizant posted a net profit of $497 million and its revenues were up 4.5% to $4.25 billion. The IT major also raised its revenue growth guidance for the full year to 4.6-4.9% in constant currency, up from the previous guidance of 3.9-4.9%.

Cognizant said that it is trying to cut costs and boost revenues. Apart from layoffs, it is also reportedly looking to increase its focus on digital growth and increasing its investments in sales.

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