After firing a considerable number of its employees, IT major Cognizant is planning another round of layoffs. As per a report published in Financial daily, the Economic Time, Cognizant is ready to fire a few hundred as a part of the restructuring that is aimed at reducing cost. Moreover, the company is exploring more ways to further cut down on cost.
The US-headquartered company is under the process of restructuring which is targeted at spurring growth and lowering cost. Further, the company is also boosting the variable pay components of salaries which will result in cost-cutting. One of the sources close to the development said, "It is part of the appraisal process; it is getting stricter. If you were a marginal performer or have not been allocated (a project), then they would look at beginning a separation process."
The employees having experience more than eight years are expected to be targeted. The exact figure to be fired is still under evaluation and would depend on growth registered in this quarter. It is to be noted that the company has already suspended non-essential travel to save costs. Cognizant cut down its revenue growth forecast earlier this year and submitted that its hiring has overtaken revenue growth which eventually led to lower margins. As per Cognizant's annual report for 2018, the company has around 281,600 employees at the end of 2018, with 194,700, or 69%, in India. Globally, the Cognizant had 288,200 headcounts as of June 30, 7 per cent more than 268,900 a year ago.
The company, which has guided for the lowest growth in its history for this calendar year, had given voluntary separation package to around 400 senior executives in 2017 as part of its cost optimisation measures. Additionally, the New Jersey-based company is also delaying the joining date of the freshers and other new employees hired. The second person added,"The joining dates are being calibrated to ensure that utilisation is maintained. There is a strong focus on cost control."
However, the company's spokesperson has said that it has started to dispatch joining letters since June this year. "We have already on-boarded several thousand students who are currently undergoing training in Cognizant Academy, and the rest will be onboarded in a staggered fashion, as is the process every year. Cognizant has a long history of honouring all campus offers and there is no reason to believe that this year will be any different," the spokesperson added.
