Software major Cognizant will ask around 400 senior executives to leave as it looks to cut costs and improve delivery efficiency.
Cognizant aims to remove executives including directors, senior directors, associate vice-presidents (AVPs), VPs and SVPs, The Times of India reported.
Cognizant has reduced the severance package from 20 weeks’ salary to three months’ pay plus one-week pay for every year of service completed. The move is a part of Cognizant’s realignment program.
“We have 290,000 employees serving clients worldwide. Like all services firms, we routinely manage supply and demand with a bench of unutilised employees. What distinguishes us is that we are enhancing our bench policy by offering additional cash and extended health benefits to those who are or will become unutilised and for whom we unfortunately do not foresee future opportunities,” a Cognizant spokesperson said.
Cognizant in 2018 sacked 200 senior employees, who had designations of director and above. Cognizant in 2019 offered a voluntary retirement scheme to 400 senior staff.
Cognizant recorded costs of $22 million on executive transition (paid to leaders who leave the firm), $64 million on employee separation, $45 million on employee retention and $38 million in third-party realignment in 2019.
The employee separations completed as part of our realignment program will reduce our compensation expense by approximately $140 million on an annualised basis,” Cognizant said in its annual report.