Cognizant is planning to lay off around 400 executives in the ranks of directors, senior directors, associate vice presidents, vice presidents. The layoffs come as the industry grapples with the impact of the coronavirus pandemic. The layoffs would be done in a staggered manner.
The company said that in a people-intensive business effectively managing the workforce is key to their cost structure. "We have 290,000 employees serving clients worldwide. Like all services firms, we routinely manage supply and demand with a bench of unutilised employees. What distinguishes us is that we are enhancing our bench policy by offering additional cash and extended health benefits to those who are or will become unutilised and for whom we unfortunately do not foresee future opportunities," said a spokesperson as mentioned in a report in Times of India.
The layoffs are part of the company's realignment programme. The company's annual report last year said that the employee separations that are part of their realignment programme would reduce their compensation expense by $140 million annually.
These layoffs come two years after Cognizant laid off around 200 senior employees at the director level and above. The year before that the company had offered a voluntary separation scheme to 400 senior employees.
This time the severance package has been restricted to three months' pay plus one week pay for every year of service instead of three months.
Earlier this month, Cognizant had delayed joining dates of students secured through campus placements to the second half of 2020. "We remain committed to growth and plan to honour more than 20,000 campus offers we have made. The timing of our trainees' start date in India will be deferred to Q3 (July-September). This will continue to be dependent on lockdowns and school schedules across India," CEO Brian Humphries had said.