Cognizant to spend carefully, will cut down on hiring and travel overheads

The IT company is attempting to align the growth in annual headcount with the annual revenue growth.


Information technology company, Cognizant, is taking measures to cut down on expenses. Not only will the company slow down hiring, but it will also reduce travel for non client-facing meetings, and also cut down on business-class travels and relocations.

Cognizant will be reinvesting in talent and digital solutions to drive growth. The American company, with a sizeable number of employees in India, began by targeting the senior executives in the second quarter and simplifying the organisational structure, which helped it save $65 million a year.

Having reported an 11.6 per cent increase in net profits in June , 2019, it revenue increased by 3.4% to $4.14 billion. The Company will be adopting further measures in the next two quarters, to bring down overall costs through several actions.

In the April-June quarter this year, Cognizant hired 2,400 people taking its workforce strength to 2,88,200. It will be recruiting more than 500 revenue-generating associates in the coming months, to various posts including customer-facing and sales-support positions.

However, considering that the Company is expecting to incur an additional cost of $48 million in compensations and in recognising and retaining the best talent, hiring will also be slowed down so that the growth in annual headcount aligns with the annual revenue growth.

It will pursue higher margins and hence, also concentrate more on digital and higher-value services. It will try and align promotions and increments with bill rate adjustments and attempt disciplined recruitment of non-billable resources.

Comment on the Article

Please enter your comment!
Please enter your name here

two × five =