Cognizant to reduce 15,000 jobs; India to face maximum impact

IT giant company, Cognizant likely to reduce its workforce, which may affect over 15,000 employees worldwide. According to a MoneyControl report, the majority of job cuts are likely to be concentrated in India. After Oracle and Amazon, this is expected to be one of the biggest tech layoffs this year. 

While the exact number of layoffs is not yet confirmed, the report suggests somewhere between 12000 to 15000 jobs. Cognizant consists of the largest workforce hub, with over 250,000 employees in India out of a global employee base exceeding 357,000 people.

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Cognizant India layoffs 

It was highlighted that the potential layoffs calculation at Cognizant was done based on the amount of money the company expects to spend on severance payments. During its quarterly earnings announcement on April 29, Cognizant stated it expects to spend between $230 million and $320 million on severance costs, which are given to employees who lose their jobs, such as compensation packages and benefits.

In India, the average annual salary for employees is around Rs 15 lakh. If laid-off employees receive severance of about six months of salary, each employee could get roughly Rs 7.5 lakh as compensation, the report stated. 

Considering the huge severance pay set aside by Cognizant under “Project Leap,” it is estimated that this budget could cover layoffs of around 12,000 to 13,000 employees in India alone.

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The report further quoted industry executives saying that clients are moving away from the traditional staffing pyramid, which heavily depends on entry-level employees. One executive added that clients are unwilling to bear the cost of training large batches of fresh hires. 

Cognizant CEO Ravi Kumar S also hinted towards restructuring, saying that the company will be carrying out changes worldwide. During the earnings called he stated that the company is heading towards a “broader and shorter pyramid,” that combines “digital labour and human labour.”

Business Today has reached out to Cognizant for clarification. We will update the story once we receive a response.