Cognizant to lay off 7,000 employees by 2020

7000 of Cognizant Technology Solutions' mid to senior-level rank associates were decided to be laid off by next year

In a major decision, NASDAQ-listed IT major Cognizant Technology Solutions (CTS) has decided to lay-off 7,000 employees in the mid to senior-level associates rank by mid-2020 as part of its cost-reduction programme.

The company said it plans to remove 12,000 people but will reskill and redeploy nearly 5,000 of them which still means 7,000 people will have to exit the company, which is the second-largest employer in IT industry in the country.

Since a significant portion of CTS’ workforce is based in India, especially in Chennai and Bengaluru, workers in the country will also be affected due to the lay-offs. However, the CTS did not make public the details of the job losses and the locations to be affected.

The decision was announced even as CTS posted a 4.1 per cent increase in net profit to USD 497 million for September 2019 quarter.

Cognizant CEO Brian Humphries said the company was announcing a simplification of its operating model and a cost reduction programme that will allow it to fund investments in growth. As part of the cost reduction programme, the company will remove about 10,000-12,000 mid-to-senior level associates worldwide from their current roles by mid-2020.
"We expect the remaining 5,000-7,000 associates to exit the company by mid-2020 either through attrition or role elimination," Cognizant CFO Karen McLoughlin said.

The cost reduction plan of CTS also involves exiting certain content work in digital operations practice.

Chennai-based Union of IT and ITES Employees said it sees the "proposed act" Of mass retrenchment of the employees despite a strong quarter result we a motive for profit maximisation ignoring the life of its employees and their families.

"UNITE calls upon the employees of Cognizant to take note of HCL Pittsburgh employees forming an Union to fight for their job security, better working conditions, unreasonable targets and better financial compensation. The HCL employees were employed for Google's Content Moderation," the statement said.