Cognizant joins layoff trend, plans to fire 3500 employees: Reports

By Gaurav Das Last updated May 5, 2023

Cognizant to layoff Employees. /(Sportpedia)

Approximately six weeks after Accenture’s announcement of laying off nearly 19,000 employees, another major IT and consulting firm has disclosed its intention to cut jobs. Cognizant announced its plan to lay off 3,500 employees while revealing its financial results for the first quarter of 2023 (January-March).

At the conclusion of Q1, Cognizant’s workforce amounted to 351,500 individuals, which represents a reduction of 3,800 from the previous quarter (Q4 2022) but an addition of 11,100 compared to Q1 2022.

The company generated $4.8 billion in revenue during Q1 and anticipates that Q2 revenue will fall within the range of $4.83 billion to $4.88 billion. Additionally, Cognizant disclosed a year-over-year net profit increase of 3%, equivalent to $580 million.

Cognizant has launched the NextGen program during the period of April to June in 2023 with the purpose of streamlining its operational model, improving the efficiency of corporate functions, and consolidating and adjusting office space to adapt to the hybrid work environment after the pandemic.

The simplification process involves operating with fewer layers, which will enhance agility and enable faster decision-making. Cognizant anticipates that the savings generated by this program will contribute towards funding further investments in people, exploring opportunities for revenue growth, and modernizing office spaces.

Cognizant anticipates that around 3,500 workers, which is roughly 1% of its workforce, will be affected by the program’s measures related to personnel.

According to Cognizant’s CEO, Ravi Kumar S, the company’s booking growth in the quarter was rapid, fueled by a combination of new and expansion work as well as several substantial deals. This growth is a testament to the company’s robust services, strong brand, and enduring relationships with its clients. Additionally, Kumar expressed optimism about the company’s voluntary attrition rate, which has been decreasing.

He further added that, the clients acknowledge our extensive comprehension of their businesses and our advantageous position to generate value for them through the convergence of technology and industry use cases. After evaluating the business for over three months, and engaging with numerous clients and thousands of employees, I am convinced that Cognizant has a robust base to expedite its growth.”