In what can be termed as biggest-ever job cut in the IT sector in India, US-based Cognizant is slashing as many as 13,000 jobs. The company announced this in a post-earnings conference call with analysts late last week. The Teaneck, New Jersey-headquartered company said that it would remove 10,000-12,000 mid-to-senior employees from their current roles. In all, Cognizant will part with some 13,000 employees in the coming months. The company is also delaying increments and promotions to senior employees.
As per an email from Cognizant CEO Brian Humphries, “We are making changes to the manager-plus annual salary revisions and promotions process. We are refining the process not simply to contain costs, but to drive greater career mobility, just in time promotions and more meritocratic culture. Therefore, for this population, we are deferring all decisions on salary increase and promotions until next year."
6,000 job cuts will be from the content moderation business that Cognizant does for Facebook. The biggest casualty of the job cut at Cognizant are mid-to-senior level employees who the company indicated are not adding much value. While the company did not provide a split, most of the layoffs are likely to be in India. The country has 70% of Cognizant's 2.9 lakh employees.
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Cognizant said that it continues to recruit and hire talent around the world. The company said that it plans to hire 5,000 for its digital operations. The job cuts are part of cost optimisation drive that started after Brian Humphries took over as the company's CEO in April. According to him, the company looked at the employee pyramid and found there had been excessive growth in the director-plus population at Cognizant in recent years and also in non-billable resources.
Other than job cuts, another key focus of the new CEO is changing the compensation structure of employees in the sales team. In a mail sent earlier this year, Cognizant CEO Humphries sent out a strong message to employees -– shape up or ship out. In the very first month of his taking over as CEO, he made two major leadership changes.