Cognizant plans another round of layoffs to slash costs, says report

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Cognizant is readying to let go of a few hundred employees, as it plans another round of layoffs as part of its strategy to slash costs, the Economic Times reported on Friday, citing sources with knowledge of the matter. Further, the report said that more ways of cutting spending were on the anvil at the IT major.
A source with knowledge of the matter told the financial daily that this was part of the appraisal process, which was "getting stricter". The source said, "If you were a marginal performer or have not been allocated (a project), then they would look at beginning a separation process." According to the report, the number of layoffs would be in a few
hundred, and employees who have more than eight years of experience would be targeted.As reportedly recently, Cognizant is exercising "tighter control" over expenses through a number of measures, including a slower pace of hiring and reduced travel expenses, as the company looks to re-invest in talent and digital solutions to drive growth. The US-based company told news agencies that it took "targeted actions" at senior-level executives in the second quarter, in a move that is expected to result in $65 million of annualised savings.
"...in the second quarter, we took targeted actions at the senior levels of our pyramid to simplify our organisation structure. These actions are expected to result in $65 million of annualised savings with approximately half of that to be realised in the remainder of 2019," Cognizant CFO Karen McLoughlin said at a recent earnings call. She added that in the next two quarters, the company expects to further reduce overall costs through a number of actions.

A Cognizant executive also told ET that the number of layoffs was being evaluated and that it would depend on growth as the quarter progresses. Further, the report said that the IT major has already suspended non-essential travel and taken other actions to cut spending...Read More