Cognizant Technology Solutions (CTS) is said to be pruning its staff strength in some verticals such as healthcare and life sciences. The number of people being asked to leave may touch around 800, as per a Times of India report. A large part of these employees maybe from a centre in Pune where Cognizant has a subsidiary Trizetto.
This is a company that Cognizant had acquired in 2015 and it specializes in developing software for the healthcare sector. Reports suggest there are some 1500 employees in this offshore centre in Pune and a bulk of the staff now being downsized will be from here. Many of these employees have already been sounded out by the HR department on what’s coming.
Cognizant has not confirmed the development except to state that it continues to enjoy a strong hold on the healthcare segment as far as providing IT solutions are concerned. The company has a strength of 30,000 in this division.
Explaining the rationale behind this decision, analysts told ET that beginning the second quarter of 2017, the business has been declining. While it was growing between 9.5% and almost 12%, it touched a low of 4.6% in the quarter ending March this year and further to 3.1% in the last quarter that ended in June. It is said some regulatory measures in the US and other external and internal issues have contributed to this lower growth rates in the past few quarters.
Some indications had come from the CEO Brian Humphries during the earnings call where he had said the healthcare business will be closely looked into and turned around since it is an important part of Cognizant’s business. “Prized Asset” were the terms used by the CEO for the healthcare division. The company made changes at the top level of the healthcare business bringing in Jeff Heenan-Jalil from Wipro. Jalil was handling healthcare in Wipro.
Independent experts feel this current move by Cognizant to downsize its headcount in the healthcare business is a good one and will pay off in the long run.