Cognizant Layoffs and kicks off a $400 million cost-cut plan
Cognizant had fired around 20000+ employees in the past and recently in this week they have also fired around another 3500 employees, making a total of more than 23500 employees this year.
The ruthless CEO of Cognizant is very happy after firing so many innocent employees as he thought that the company would be saving a lot of money. The CEO is not even thinking about the poor and innocent employees and about their families and how they will survive after this.
CEO Ravi Kumar S has embarked on a $400-million cost-saving plan, which the company calls NextGen. The plan includes cutting 3,500 non-billable roles, or 1% of the workforce, and rationalizing real estate costs, which would involve giving up 80,000 seats. Following the announcement, Cognizant's stock on Nasdaq surged 7%.
The company expects $350 million in savings in 2023 and $50 million in savings in 2024. About $200 million of these savings will come from employee severance and other costs related to non-billable personnel, and $200 million will come from office space consolidation.
"We're redistributing our physical workspace. We are in a hybrid era of distributed lives and distributed work. Our presence in smaller cities will be important. Many associates have moved to tier-2 cities, and they will probably remain there in the foreseeable future. We can optimize on this space. We don't expect 100% of the people to return to offices," Kumar said.
Cognizant reported a 3 percent (year-on-year) 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 percent year-over-year, in Q1 2023.
However, the Board recognized the need for Cognizant to advance more rapidly, increase its commercial momentum, and accelerate revenue growth in preparation for 2023.
According to Moneycontrol, the Chairman of the Cognizant board, Stephen J. Rohleder, stated in a statement, “We believed that doing so required a CEO transition.”
“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.
Cognizant to shut down offices
According to the Moneycontrol report, one of the measures that CEO Ravi Kumar S has announced in an effort to revive the business in the face of significant competition from Accenture, Infosys, and TCS is to lay off 3,500 employees and reduce office space. It is currently unknown how many Indians will be affected by the decision.
Also, Cognizant, a leading global IT services provider listed on the Nasdaq, has announced that it is relinquishing 11 million square feet of office space, which translates to nearly 80,000 seats across major Indian cities.
The decision comes as the company adapts to a hybrid model and rationalizes workspaces in a post-pandemic environment. Industry experts have viewed this move as no different from what other companies are doing in the face of a potential economic slowdown.
The company expects $350 million in savings in 2023, and $50 million in savings in 2024. About $200 million of these savings will come from employee severance and other costs related to non-billable personnel, and $200 million will come from office space consolidation.
Mindful is situated in the US yet has a significant piece of its tasks in India. Kumar addressed shareholders with the following statement regarding the Indian workforce of the company, “I believe India will be the world’s technology talent hub for the next decade.”
Further added, “We intend to keep exploiting India’s rich IT ability pool as we escalate endeavors to enroll in the biggest urban communities as well as in medium size metropolitan regions. On Indian college campuses, the Cognizant brand is well-known.”