Cognizant to trim workforce by five per cent

In an endeavour to shift its focus from traditional IT services to digital, the company plans to trim its workforce

In a move that may create a stir in the IT industry, Cognizant Technology Solutions, which has a significant workforce in India, is apparently looking at reducing its employee count by as much as five per cent.

As a common practice across IT firms, as part of the annual appraisal exercise that ends in March, the bottom one per cent of the workforce is weeded out for non-performance. However, Cognizant, in an endeavour to shift its focus from traditional IT services to digital, is reportedly looking ahead at a sizeable trimming of its workforce, by doing away with redundant roles. The company has around 260,000 employees in its workforce, of which around 75 per cent is based in India.

As part of its workforce management strategy, the company conducts regular performance reviews to ensure it has the employee skill sets necessary to meet client needs and achieve its business goals.

This process results in changes, including some employees transitioning out of the company. A spokesperson shared that in any given year, the numbers may bounce a percentage here and there, but resizing the employee base is part of its standard practice. At the same time, the company will continue to enhance its capabilities and hire for roles across all practice areas.

The appraisal cycle this year, comes in the backdrop of various industry-changing developments. The digitisation and automation wave, which has caught up in the industry in recent times, will have an impact on the cutting down of manpower.

Annualised attrition of 15.6 per cent during the quarter—including BPO and trainees—was down 350 basis points from a year ago. As such, there is no consistent methodology in the industry to report attrition. Cognizant has historically reported attrition by annualising the turnover, which occurred within the quarter, including both voluntary and involuntary. Cognizant’s attrition statistics include all departures, including BPO employees and trainees. The company ended the quarter with approximately 260,200 employees globally.

Cognizant is also investing extensively in training and reskilling its team, and in substantially expanding its local workforces in the US and other local markets around the world, where it operates.