Cognizant may soon let go 12,000–15,000 employees globally, according to a report by Moneycontrol. On April 29, Cognizant said it expects to incur between $230 million and $320 million in severance costs under its newly announced Project Leap, without specifying the number of employees likely to be affected. However, industry estimates based on salary structures and severance norms suggest that the total number of impacted employees could be far higher than earlier indicated.

The company employs over 357,000 people worldwide, with more than 250,000 based in India. Using back-of-the-envelope calculations, the potential scale of layoffs becomes clearer. In India, where the average annual salary is estimated at around Rs 15 lakh and severance typically amounts to six months’ pay, the cost per employee comes to roughly Rs 7.5 lakh. Applying this to a significant portion of the restructuring budget indicates that India alone could account for around 12,000 to 13,000 job cuts.

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In higher-cost regions such as the United States, where average salaries are closer to $100,000 annually, severance payouts ranging from four to six months translate to about $50,000 per employee. This means fewer employees would be impacted in these geographies for the same financial provisioning. Combining these regional assumptions yields a global estimate of 12,000 to 15,000 employees. Sources cautioned that these figures are indicative and depend on variables such as tenure, salary mix, and execution strategy.

Shift in delivery model driving restructuring

The planned layoffs reflect a structural shift in how IT services are being delivered, due to changing client expectations. Industry executives noted that traditional staffing models are losing favour. “Customers are not okay with full pyramids anymore and don’t want to fund training of freshers,” one executive told Moneycontrol, pointing to a move away from pyramid-heavy workforce structures.

Cognizant’s leadership has acknowledged this transition. “It’s a global programme… various parts of the organization will go through the process,” said chief executive officer Ravi Kumar S while addressing the media after the company’s quarterly results. He added that Cognizant is moving towards “a broader and shorter pyramid” and a model that combines “digital labour and human labour”.

Earlier guidance and evolving estimates

Earlier disclosures had suggested a far smaller impact. Cognizant had indicated that around 4,000 jobs, roughly 1% of its workforce, would be cut under Project Leap. At the same time, the company committed to hiring more than 20,000 fresh graduates in 2026, mirroring a similar intake in the previous year.

The initiative, which is expected to cost between $230 million and $320 million primarily in severance, is aimed at generating up to $300 million in savings this year and improving margins. The strategy underscores a broader industry trend of trimming mid-level roles while increasing fresher hiring to build AI-ready talent pipelines.

This approach aligns with peers such as TCS and Accenture, which are also balancing cost optimisation with investments in entry-level, AI-skilled talent.

The company’s internal communication further reinforces the scale and urgency of the shift. In a memo to more than 350,000 employees, Surya Gummadi described the layoffs as part of a transformation. He said the changes reflect a “real” and “accelerated” shift in how the industry operates, with Cognizant increasingly focusing on redeploying resources towards AI capabilities and partnerships.