In an attempt to cut costs and increase margins, Cognizant, the IT services company is planning to lay off 3,500 employees and also let go office space.
Cognizant, which has its primary operations in India, is bracing for a revenue decline in 2023.
Ravi Kumar S, the new CEO, who replaced Brian Humphries, will work towards turning around the company amidst competition from the likes of Infosys, Tata Consultancy Services and Accenture.
Cognizant reportedly has the lowest margins in the IT space presently, with a margin of 14.6 per cent. For the entire year, Cognizant predicts an adjusted operating margin of about 14.2 per cent and revenue guidance of $19.2 to $19.6 billion. This is a fall of -1.2 per cent to 0.8 per cent in reported terms.
In Q2, Cognizant predicts a revenue band of $4.83 to $4.88 billion — a decline of -1.6 per cent to -0.6 per cent, or a decline of 1 per cent to flat in constant currency.
Post taking over in January 2023, Kumar led the company through a major chunk of Q1 of FY23, beating the expectations of experts.
While the net profit of Cognizant increased by three per cent year-on-year (YoY) and 11.2 per cent sequentially, the revenue posted was $4.81 billion, a fall of 0.3 per cent year-on-year, more than the guidance range of $4.71-$4.76 billion.
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