Cognizant is likely to cut job of several hundred employees as part of the strategy to cut costs and boost revenue growth, according to media reports.
The technology outsourcing company is undergoing a widespread restructuring under the leadership of CEO Brian Humphries. Cognizant will target to remove employees with more than eight years of experience during the next round of layoffs, said reports.
Cognizant reported operating margin of 14.9 percent in Q2 2019 as compared to 16.7 percent in the year-ago quarter.
Karen McLoughlin, chief financial officer, said earlier: “We are implementing actions in the second half of the year that we expect will lower our existing cost structure and allow for greater investment in growth, talent, and digital solutions.”
“We are taking the necessary steps to position Cognizant for improved commercial and financial performance,” said Brian Humphries, chief executive officer of Cognizant Technology Solutions, on July 31 after the company’s second quarter earnings report.
Earlier this year, Cognizant had lowered its revenue growth and said its margins dropped on account of job addition. The US-based company had 288,200 employees as of June 30, as compared with 268,900 employees a year ago. It had about 281,600 employees at the end of 2018, with 194,700, or 69 percent, in India, according to Cognizant’s annual report for 2018.
The number of job cut would also depend upon the quarterly earnings of the company. The IT services company has already put an end to unnecessary travel and is exploring ways to boost the variable component of the salary package.
The IT major reported a growth of 11.6 percent in its net profit at $509 million for the second quarter ended June 30. Cognizant’s revenue grew 3.4 percent to $4.14 billion.