More news of downsizing at IT major Cognizant Technologies has surfaced, this time directly from the horse’s mouth, that is, Brian Humphries, CEO of the company.
In an interaction with investors in the US (Cognizant Technologies is a company registered in the US with its headquarters in Teaneck, New Jersey), Humphries has disclosed that the details of how many heads will roll will be shared in public in October when the company would be declaring its results for the third quarter of 2019.
These job cuts will be part of an over restructuring that Humphries is trying to undertake to make Cognizant a lean and mean organisation in every sense of the word. He has said, the company has been losing contracts to rivals Tata Consultancy Services and Infosys, primarily due to higher costs, and reduction of costs is going to be one of his priorities. Brian Humphries took over as CEO at Cognizant just 4 months earlier in April 2019.
The CEO has said rather than doing the exercise in bits and pieces, he would rather wield the axe in one strong blow and be done with it. He has also clarified that the affected employees will be notified earlier than the date of announcement to the public. This means this month is going to be a virtual bloodbath at Cognizant if you went by the hints thrown by the CEO.
The exact words uttered by Humphries may point to that: “We need to be draconian with the cost structure and use those savings to fund the future”.
It is important to note that for Cognizant, any stagnation has only been of recent origin. For almost 25 years, the IT giant was the envy of its rivals as it kept posting impressive results.
The CEO claims they have identified the cause of the slowdown and are going about rectifying the mistakes. One area to be looked at more closely is the salary structure of the employees. Those with clearly measurable goals will be moved to variable pay.
A key focus will be changing the compensation structure. One of the measures being considered is raising the variable pay component of employees’ salaries. This may specifically apply to those handling the sales and marketing activities.