Cognizant to lay off around 7,000 staff
The company has decided to remove 10,000-12,000 mid-to-senior level employees worldwide from their current roles in coming quarters.
Chennai: Global IT services company Cognizant will lay off around 7,000 mid-to-senior level employees globally and is exiting the Digital Content Business, which will affect another 6,000 jobs.
The company has decided to remove 10,000-12,000 mid-to-senior level employees worldwide from their current roles in coming quarters. As on September 30, Cognizant’s worldwide employee strength stood at 2,89,900. The net reduction will be 5,000 to 7,000 jobs, or about two per cent of the company’s total population, as the company aims to re-skill and redeploy about 5,000 of the total employees impacted, said, CEO Brian Humphries in a post-earnings call.
The decision is part of the two-year “Fit for Growth” plan that will simplify the way work is done, lower the cost structure, and fund investments that will enable growth. The plan will sharpen the company’s strategic focus and simplify the operating model.
Cognizant is also exiting the Digital Content Business, which is not in line with the company’s long-term strategic vision. The exit will happen over the course of 2020.
Exiting this area will impact an additional 6,000 jobs worldwide. The company intends to work with its partners to explore ways to shift the roles to alternative vendors.
The exit will impact revenue in the firm’s Communications, Media and Technology segment. As per reports, Cognizant had about 500 workers in Hyderabad looking for sensitive topics or profane language in Facebook vid-eos. The company found that work focused on determining whether content violated client standards was not part of its strategic vision as it can have objectionable materials.
Meanwhile, Cognizant has raised its revenue growth guidance for the full year to 4.6-4.9 per cent in constant currency, which was higher than its previous guidance of 3.9-4.9 per cent issued in the previous quarter’s earnings. For the third quarter ended September, the company registered revenue of $4.25 billion, up 4.2 per cent for the same quarter previous year. Digital revenue, growing at 25 per cent, accounts for about 35 per cent of the company’s revenue. The company’s net profit stood at $497 million versus $477 million for the same quarter last year.