Lay off in Cognizant to continue; rationalise cost and boost growth
Cognizant is likely to haircut hundreds of employees in a bid to marginalise the cost and boost growth, a media report says. The company is undergoing a widespread restructuring under the leadership of CEO Brian Humphries. It seems the bubble is getting busted.
The company had 288,200 employees as of June 30, as compared with 268,900 employees a year ago. It had about 281,600 employees at the end of 2018, with 194,700, or 69%, in India, according to Cognizant’s annual report for 2018.
The report further says, employees with more than eight years of experience would be targeted in the next round of layoffs, said reports. Earlier this year, Cognizant had downgraded its revenue growth forecast and said its margins shrank on account of headcount addition. The number of layoffs would also depend upon the quarterly earnings of the company.
The company has already put an end to unnecessary travel and is exploring ways to boost the variable component of the salary package, the reports said. For the second quarter ended June 30, the IT major reported a growth of 11.6 per cent in its net profit at $509 million as compared to the same period of last year. The revenue at $4.14 billion grew 3.4 per cent on year-on-year (YoY) basis while in constant currency terms, the growth rate stood at 4.7 per cent. For the complete year, the company guided for revenue growth in the range of 3.9-4.9 per cent in constant currency terms, lower than its earlier guidance of 3.6-5.1 per cent released in May.
To increase the bottom line and boost its revenue, there are many best practices has adopted in the organisation that includes, tightening travel budgets. It is increasing variable pay as a part of its structural rejig. Karen McLoughlin, CFO, Cognizant said, the company will focus on higher margins.
In view of current slowdown in the economy and the economy is in sluggish mode, the company has to do various corrections to boost the growth.Another report says, Cognizant to lay off nearly 800 employees in healthcare, life sciences and most of the layoffs may reportedly be from Cognizant’s subsidiary Trizetto’s office in Pune, which it acquired four years ago.
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