US-based IT services provider Cognizant is planning to cut its senior management jobs in order to reduce cost.
The job cut will result in severance costs of up to $35 million for the company. The BPO firm did not reveal the specific details on job reduction or the anticipated savings from the development.
The global technology outsourcing company has a significant portion of its employees based in India. The total number of employees at Cognizant was 268,900 at the end of June 2018.
“During the remainder of 2018, we intend to continue to improve our cost structure by further optimising the higher end of our resource pyramid,” Cognizant CFO Karen McLoughlin said during an investor call after the Q2 results.
Cognizant’s second quarter revenue rose 9.2 percent year-over-year to $4.01 billion fuelled by digital and Cloud clients.
Cognizant’s digital revenue grew in the low 20 percent range, and is approaching 30 percent of total revenue.
Cognizant expects third quarter revenue to be within a range of $4.06 billion to $4.1 billion. Cognizant expects full-year revenue to be within a range of $16.05 billion and $16.3 billion, a growth of 8.4 percent to 10 percent.
Cognizant has delivery facilities in over 20 states in the US as well as multiple centers in Canada and Mexico, with plans to expand this network in 2019.
Communications, Media and Technology +15.8%
Products and Resources +12.4%
Banking and financial services +4.5%
Healthcare +10.1%
Cognizant said its clients now include 4 out of the top 6 oil and gas super majors, 7 of the top 10 U.S. utilities and 5 of the top 10 electric utilities in Europe.
Cognizant said it is building a data-driven digital organization for Endeavor Energy, which supplies electricity to more than 2.4 million people in Australia.
Cognizant has 8 of the top 15 industrial manufacturers as clients in manufacturing and logistics.
Consulting and technology services represented 57.1 percent of revenue and outsourcing services 42.9 percent of revenue for the quarter. Consulting and technology services grew 6 percent year-over-year. Outsourcing services revenue grew 13.6 percent from Q2 a year ago.
