Amid job crisis, US-based IT major Cognizant recently announced its results for the April-June quarter. In its results, they revealed that the company’s headcount had reduced by 10,500 people in the quarter.
Meanwhile earlier on March 31, Cognizant had 2,91,700 employees globally, which now stands at 2,81,200 (as of June 30). While speaking to investors, the Cognizant CEO said the voluntary attrition (employees resigning on their own) stood at 10.5 percent, which roughly counts to 1,100 employees.
So, the results suggests that the 9,400 employees may have been let go by the company which was an involuntary attrition.
According to Times Now report, CEO Brian Humphries while speaking to investors during the earnings call yesterday said that the company will be focused on performance orientation when it comes to employees, “which means that we are now removing the under performers on an annual basis.”
Not just that Cognizant, also seen a spate of senior exiting from the company.
While announced its Q2 results yesterday, Cognizant also announced that its Chief Financial Officer (CFO) Karen McLoughlin resigned after more than eight years in the concerned post and 17 years at the company. Karen, will be replaced by Jan Siegmund as the CFO starting September 1, 2020.
“Karen will continue in her capacity as CFO through August 31st and then remain with us in an advisory role through December 31, 2020, thereby ensuring a smooth CFO transition,” Brian told investors.
Looking at the recent resignation, this is the third senior exit from the company in July, after India CMD Ramkumar Ramamoorthy and Global Delivery Head Pradeep Shilige who had resigned earlier this month. While the other exits included senior vice-presidents Jaideep Poondir, Rajesh Balaji and Vinayambika Kidiyur, and vice-presidents Archana Ramanakumar and Vikash Gaur.
Highlighting about growth and up-gradation, Brian said that the company has upgraded the profile of the managing director's role in India to be a direct report to the executive committee, and him (Brian).
Taking a look at October 2019, Cognizant had said that it put in place a cost reduction plan ‘Fit for Growth’ as part of which it will be removing 10,000 to 12,000 mid-to-senior level associates from their current roles. Of these, the company said 5,000 associates would be re-skilled and redeployed, resulting in around 5,000-7,000 employees eventually losing their jobs in the coming quarters, Times Now further reported.
Also during the earning calls for Q2 results, CEO Brian stated that net headcount declined approximately 2.5 percent year-over-year including the roughly 7,000 associates exited under the Fit for Growth plan.
“Given the volatility we've seen in the top-line, in the early part of this year, notably because of COVID, it goes without saying that we have responsibilities vis-a-vis, our shareholders, yes, to protect digital skills. But in the same vein, we also have to protect the bottom line by optimizing our team and our bench around the revenue curve. And that's why you've seen in recent quarters a disparity between total attrition levels versus voluntary attrition levels or involuntary levels,” he added.
Looking into results, Cognizant said that the macroeconomic environment remains uncertain in light of the pandemic. For the full year 2020, Cognizant expects revenue to decline in the range of 2 percent to down 0.5 percent year-over-year in constant currency.
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