Cognizant To Lay off 3,500 Employees And Close Some Offices

Cognizant said it is laying off one per cent of its workforce or 3,500 employees as the company’s revenue slowed down this year.

New Delhi: IT major Cognizant said it is laying off one per cent of its workforce or 3,500 employees as part of cross-cutting measure as the company’s revenue slowed down this year. The company will also close some office spaces as it looks to reduce its real estate costs by “eliminating 80,000 seats and 11 million square feet in large cities in India”.

“We expect the personnel-related actions of this programme to impact approximately 3,500 employees or approximately 1 per cent of our workforce. Our drive for simplification will include operating with fewer layers in an effort to enhance agility and enable faster decision-making. The company expects savings generated by the program to help fund continued investments in people, revenue growth opportunities, and the modernisation of office space,” the company said.

The total employee headcount at the end of the first quarter was 3,51,500, a decrease of 3,800 from the previous quarter 2022 and an increase of 11,100 from Q1 2022, according to the company. Cognizant said that the company is expected to see more decline in their revenue in 2023.

Cognizant reported a 3 per cent (year-on-year) rise in its net profit to $580 million in the March quarter of FY23. The company reported revenue of $4.8 billion, which declined 0.3 per cent year-over-year, in Q1 2023.

“Our accelerated bookings growth in the quarter, which included several large deals and a healthy mix of new and expansion work, reflects the strengths of our services, our brand, and the longstanding relationships we have with our clients. I am also encouraged by the continuing reduction in our voluntary attrition,” said Ravi Kumar.

Under the ‘NextGen’ programme, Cognizant expects to record costs of approximately $400 million with approximately $350 million of such costs anticipated in 2023 and approximately $50 million in 2024.

Earlier, Cognizant had laid off over 10,000 employees in 2020 when the coronavirus pandemic first broke out which led to lockdowns in India and around the world.