Cognizant to lay off 3500 employees

The world's largest IT company Cognizant said on Thursday that in 2023 the company is going to lay off 3,500 of its employees due to lack of revenue. This is 1% of the company's total workforce (mainly non-billable). Cognizant has launched a 'NextGen' program aimed at simplifying its operating model, optimizing corporate functions and consolidating and rearranging office space to reflect the post-pandemic hybrid work environment.

"We expect that approximately 3,500 employees, or approximately 1 percent of our workforce, will be affected by the personnel-related actions of this program," the company said in a statement.

"Our drive for simplification will include working with fewer layers in an effort to increase efficiencies and enable faster decision making," the company said.

More than 3.5 lakh employees work in the company

The company expects the savings from this program to support continued investment in people, revenue growth opportunities and modernization of office space. According to the company, the total number of employees at the end of the first quarter was 3,51,500, which was 3,800 less than the previous quarter 2022 and 11,100 more than the first quarter of 2022.

How was the performance in the last financial year

Cognizant reported a 3 per cent (year-on-year) increase in its net profit to $580 million in the March quarter of FY2023.

The company reported revenue of $4.8 billion, which declined 0.3 percent year-on-year in the first quarter of 2023.

"Our accelerated bookings growth in the quarter, which included several large deals and a healthy mix of new and expansion work, reflects the strength of our services, our brand and the longstanding relationships we have with our customers," said Ravi Kumar.

Under the 'NextGen' programme, Cognizant expects to incur record costs of approximately $400 million, of which approximately $350 million is expected in 2023 and approximately $50 million in 2024.

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