Cognizant Technology Solutions today said it will be withdrawing its 2020 guidance that was provided on February 5, 2020 in the wake of coronavirus epidemic.
Cognizant said its first quarter revenue is expected to be $4.22-$4.23 billion, up 2.7-2.9 percent from the prior-year quarter, including a negative 50 basis point impact from the exit of certain content services.
Cognizant said its financial performance in the first two months of the first quarter was on track to exceed previous guidance, driven by strong performance across North America market.
During the latter part of March, COVID-19 increasingly affected Cognizant’s business due largely to delays in project fulfillment as delivery, particularly in India and the Philippines, shifted to work-from-home.
Cognizant faced reduction in client demand, primarily in the travel and hospitality industries.
IT vendors — especially those exposed to the most volatile sectors such as industrials / manufacturing, retail and travel — will see a challenging period, says Boz Hristov, Professional Services Senior Analyst, Technology Business Research.
Cognizant expects the pandemic to reduce client demand as its societal and economic impact causes broader disruptions across industries in second quarter.
Cognizant reported 39 percent drop in net profit to $395 million in the fourth quarter ended December 31, 2019. Fourth quarter revenue of Cognizant rose 3.8 percent to $4.3 billion.
Cognizant CEO Brian Humphries said: “We are committed to helping our clients as they navigate unprecedented business challenges as well as supporting the efforts of governments globally to contain the spread of the virus.”
Cognizant has 292,000 associates globally. Cognizant will provide an additional payment of 25 percent of their base pay for the month of April to employees at the Associate level and below.
Cognizant has standardized 14 days sick-leave coverage globally for COVID-19 cases or self-quarantine without impacting other sick leave or vacation programs.
