Cognizant is likely to lay off a few hundred employees in a bid to cut down on costs and boost growth, according to media reports. The company is undergoing a widespread restructuring under the leadership of CEO Brian Humphries. Employees with more than eight years of experience would be targeted in the next round of layoffs, said reports. Earlier this year, Cognizant had downgraded its revenue growth forecast and said its margins shrank on account of headcount addition. The company had 288,200 employees as of June 30, as compared with 268,900 employees a year ago. It had about 281,600 employees at the end of 2018, with 194,700, or 69%, in India, according to Cognizant’s annual report for 2018.
The number of layoffs would also depend upon the quarterly earnings of the company, as per reports. The company has already put an end to unnecessary travel and is exploring ways to boost the variable component of the salary package, the reports said. For the second quarter ended June 30, the IT major reported a growth of 11.6 per cent in its net profit at $509 million as compared to the same period of last year. The revenue at $4.14 billion grew 3.4 per cent on year-on-year (YoY) basis while in constant currency terms, the growth rate stood at 4.7 per cent. For the complete year, the company guided for revenue growth in the range of 3.9-4.9 per cent in constant currency terms, lower than its earlier guidance of 3.6-5.1 per cent released in May.
In view of current slowdown in the economy, Prime Minister Narendra also took stock of the situation and met Finance Minister Nirmala Sitharaman to discuss ways to stall slowdown and boost growth by way of policy reforms, according to reports. Prime Minister Modi is believed to be worried about the job cuts in various sectors and has asked Sitharaman to give a detailed analysis of the current situation as to why the economy is in such a sluggish mode. The automobile sector has already demanded a cut in GST rates and introduction of scrappage policy.