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Cognizant to layoff 350 senior employees earning up to Rs 1.2 crore to cut costs

US-based IT company Cognizant has decided to layoff nearly 350 senior employees who earn annual salaries between Rs 80 lakh and Rs 1.2 crore as the company wants to bring down cost and turn its focus more towards digital from traditional, the Economic Times reported citing people aware of the move.

 

Most of these employees are based out of India and are aged 50-55 years. The list has been submitted to chief executive officer Brian Humphries’ office, the people mentioned above told the business daily.

 

These employees are part of the 10,000-12,000 mid-to-senior level positions globally that the company said in October it would remove from their current roles in the coming quarters, the people said. “We have nothing to add to what was stated in our Q3 earnings call,” a Cognizant spokesperson said in response to ET’s questions. On the conference call, the company had said it would reskill and redeploy about 5,000 of those impacted.

 

Analysts said though the number of affected people was small in this round, the company could significantly bring down costs as they are high-paying employees.

 

“This is a move to cut costs and improve margins. We can expect other moves to cut costs and this is likely to follow a model of further reorganisation with some additional headcount reduction,” the publication quoted Peter Bendor-Samuel, the chief executive at IT advisory and research firm Everest Group as saying.

 

He does not foresee this to be replicated by many of Cognizant's peers. “We anticipate we are getting close to the end of this cycle. We do not anticipate this will be picked up and replicated with other service providers.”

 

The Nasdaq-listed IT services firm had earlier cut the bench time to 35 days from 60 days for those employees who aren’t on billable projects. After 35 days, they could be asked to leave. The formal exit process may take another 60 to 90 days.

 

On the conference call with analysts, Cognizant CFO Karen McLoughlin had said its actions were “critical for the long-term health and competitiveness of the company”.

Source: ETNOWNEWS.COM