Cognizant, the Nasdaq listed IT services major with a large employee presence in India, has revised its revenue guidance for the second time this calendar year and has placed large bets on digital technologies which have witnessed higher growth than the company’s overall average. The company is now able to meet digital’s market demand at a large scale, Debashis Chatterjee, president, global delivery, Cognizant, tells PP Thimmaya in an interview.

Why has there been a steady drop in the overall headcount in Cognizant since March this year?
If one looks at gross addition this quarter, it was 14,000. However, there were other factors such as the performance management and severance-related programme we had initiated continued in this quarter. The voluntary attrition is definitely higher than what we would like it to be and it may be tied to the fact that we pushed our promotions to the fourth quarter this year. It is also not unusual to see a period of high attrition, especially when the market is ripe for new skills. Given the scarcity of digital skills, we have been hiring and retraining our entire existing workforce. However, we do see increased amount of poaching by other companies. We have to accept the fact that some of these people will be poached by others. We will continue on develop on technical skills, especially digital.

Will Cognizant now look at hiring people with different kind of skill sets?
Absolutely. We are retraining a lot of people with respect to digital skills. It is a combination where we have to hire from the market and retrain the existing workforce. Some of the skills we have been focusing on retraining are data science, design thinking, cyber security, internet of things, AI, and automation. In our campus programme, we have realised the need to go for skill-based hiring rather than scale based. Skills required may not be necessarily that we have hired in the past. We can get these specific skills from the campuses as some of them have gone ahead in getting their people ready for hiring.

What are the reasons for Cognizant turning in a steady growth trajectory right through this year?
The first thing is we are turning Cognizant into a company that envisions and can build digital business for the future. This is happening because of our deep industry knowledge, investing in next generation technologies, good consulting capability, investments in platform-based software and solutions. The second thing is that digital is no longer a choice for our clients and they realise this. We have also transformed our organisation into three digital practice areas: business, operations and systems & technology. When clients are talking digital at scale, we are able to provide end-to-end services.

How is the digital business growing for Cognizant?
Bulk of the companies we work for are traditional brick and mortar ones who have the ambition to become digital. Our digital revenue continues to grow faster than company’s average. There are applications which are getting built on cloud but at the same time there tremendous opportunities in optimising heritage IT, which is the legacy application. Even in the traditional business of IT, clients are continuously looking at optiimising the cost structure. This is also an opportunity in terms of digital business which is focused on modernising, simplifying and securing heritage IT.

What were the reasons for softness in financial services vertical this quarter?
We have portfolio of services and industry verticals. We expect every vertical to perform in different way in each quarter. In the case of financial services, we had good growth in insurance and even within regional banks, but this was offset by weakness in money centred banks. One of the reasons is that they are optimising on the cost structure. However, the digital part of our revenue in the financial services has grow exactly how the overall revenue at the organisation has grown.