IT major Cognizant to lay off 3,500 employees, reduce office spaces
IT major Cognizant on Thursday said it will lay off 3,500 employees, or approximately 1 per cent of its workforce. As it sees revenues slowing down in 2023.
The company will also reduce its real estate costs by “eliminating 80,000 seats. And 11 million square feet in large cities in India”.
Cognizant has initiated a ‘NextGen’ programme aimed at simplifying its operating model, optimising corporate functions. Consolidating and realigning office space to reflect the post-pandemic hybrid work environment.
“We expect the personnel-related actions of programme to impact approximately 3,500 employees or 1 percent of workforce,” the company said.
“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 added.
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 reported a 3 percent 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.