About 400 senior executives of Cognizant have accepted the company's voluntary separation package (VSP), a move that the US-based company said will help it save about $60 million annually, according to a PTI report on Sunday.
A majority of Cognizant's 256,000-strong workforce is based in India. It is estimated that of the 400 people who opted for the separation, a large number could be from India.
The company did not disclose details of how many Indians have accepted its separation offer.
Cognizant had initiated a voluntary separation programme in May this year. The company offered up to nine months of salary as part of the VRS package to some of its top-level executives in the US and India.
"Of the $39 million of realignment charges, $35 million was for the roughly 400 associates who accepted our VSP. We expect approximately $60 million of annualised savings as a result of the VSP," Cognizant CFO Karen McLoughlin said at a recent investor call.
She explained that these "adjustments" will help improve the company's profitability. She added that Cognizant expects to incur additional cost related to advisory fees, severance, lease termination, and facility consolidation costs in the remaining part of 2017, the PTI report said.
The Cognizant CFO said that while the company will carefully manage headcount, it will continue to hire and invest in critical skills needed to grow Cognizant's digital business.
Noting that the company had made "good headway" in the June quarter, McLoughlin said that the company will look at driving utilisation rates higher by "slowing the pace of our hiring and improving resource alignment" to reskilling and multi-skilling programmes, the report said.
Cognizant's overall headcount decreased by about 4,400 people at the end of June from March 2017 quarter, even though it had hired 10,800 people (gross) during the June quarter.
The Cognizant CFO said that Cognizant's attrition level was higher than normal given reductions resulting from performance evaluations and the voluntary separation programme.
The over $13 billion Cognizant has also raised the lower end of its revenue outlook for the year and now expects its topline to grow 9-10 per cent, instead of 8-10 per cent growth expected earlier.
The PTI report quoted Cognizant President Rajeev Mehta as saying that his company is investing "tens of millions of dollars" this year to continuously deepen and broaden skills in areas like analytics, artificial intelligence, data science, and digital security.
