BENGALURU: Cognizant has decided to let go of nearly 350 people who earn annual salaries ranging from ?80 lakh to ?1.2 crore, people with knowledge of the move said, as the company seeks to bring down cost and turn its focus more towards digital from traditional technology services.
These employees are aged 50-55 years and most of them are based out of India. The list has been submitted to chief executive officer Brian Humphries’ office, the people said.
They are part of the 10,000-12,000 mid-to-senior level positions globally that the company said in October it would remove from their current roles in the coming quarters, the people said. “We have nothing to add to what was stated in our Q3 earnings call,” a Cognizant spokesperson said in response to ET’s questions. On the conference call, the company had said it would reskill and redeploy about 5,000 of those impacted.
Analysts said though the number of affected people was small in this round, the company could significantly bring down costs as they are high-paying employees.
“This is a move to cut costs and improve margins. We can expect other moves to cut costs and this is likely to follow a model of further reorganisation with some additional headcount reduction,” said Peter Bendor-Samuel, the chief executive at IT advisory and research firm Everest Group.
He does not foresee this to be replicated by many of Cognizant’s peers. “We anticipate we are getting close to the end of this cycle. We do not anticipate this will be picked up and replicated with other service providers.”
On the conference call with analysts, Cognizant CFO Karen McLoughlin had said its actions were “critical for the long-term health and competitiveness of the company”.
Source: Economic Times
