Cognizant has announced that a major part of the process of laying off of 7,000 employees as part of its Fit For Growth plan has been completed. This was disclosed during its recent earnings call. As part of the Fit For Growth plan which was announced in 2019, 12,000 employees who belonged to the mid and senior level were going to be impacted. While 5,000 of them would be reskilled, the rest (7,000) would be asked to leave.
In its recent earnings call, Cognizant said that “majority of the actions under Fit for Growth are complete and we have achieved our savings targets.”
In October 2019, CEO Brian Humpries had said that this plan is expected to run for two years and is designed to simplify the way the company works, reduce cost structure and fund investments in the business which will enable growth.
As of September 2020, the total employee count of the company stood at 2,83,100, down from 2,89,900 in Q3 of FY19. This is a reduction of 6,800 employees over the past year.
The company also said that it has onboarded 2,000 employees in the recent quarter.
For the current quarter, Cognizant reported an industry-high level of attrition of 18% and said that voluntary attrition stood at 10%.
When Cognizant announced its results for the April-June quarter in 2020, it had shown that its headcount had reduced by 10,500, of which voluntary attrition stood at around 1,100 employees, effectively laying off around 9,400 employees.
“Net headcount declined approximately 2.5% year over year, including the roughly 7,000 associates exited under the Fit for Growth Plan. These cost actions, as well as increased rigor in our performance management process, are reflected in our elevated annualized attrition rate of 24%,” former CFO Karen McLoughlin had said during the earnings call for the quarter ending June.
In the latest quarter, Cognizant said that its voluntary attrition was down for the fifth-straight quarter. However, CEO Brian Humpries said that they expect voluntary attrition to go up soon after merit-based promotions and salary increase cycle.