IT Company Cognizant Prepares for Layoffs: 15,000 Employees Worldwide to be Let Go; India to See the Highest Job Losses
Major IT sector firm Cognizant is set to undertake a significant reduction in its workforce, a move that could impact over 15,000 employees globally. According to a report by Moneycontrol, these layoffs will result in the highest number of job losses in India; this event is being regarded as one of the largest tech sector layoffs of the year, following those at Oracle and Amazon.
Out of Cognizant’s total workforce of over 357,000 employees, 250,000 are based in India. Although the company has not yet announced the exact number of layoffs, reports suggest that between 12,000 and 15,000 jobs could be cut. Since India serves as the company’s largest workforce hub, it is likely to bear the brunt of these layoffs.
Company to Spend $320 Million on Severance
The company has estimated the scope of these layoffs based on the budget allocated under its “Project Leap” initiative. While announcing its quarterly results on April 29, Cognizant stated that it expects to incur severance costs—compensation paid to employees upon termination—ranging from $230 million to $320 million. This figure encompasses both the compensation packages and other benefits provided to the affected employees.
Average Annual Salary of Employees in India: ₹15 Lakhs
The average annual salary for employees in India stands at approximately ₹15 lakhs. If the employees laid off during this exercise are provided with severance pay equivalent to six months’ salary, each employee would receive approximately ₹7.5 lakhs. Based on this calculation, the budget allocated by the company could potentially cover the severance costs for approximately 12,000 to 13,000 employees in India alone. Evolving Client Preferences and a New Model
Industry experts note that clients are moving away from the traditional ‘staffing pyramid’ model, which historically relied heavily on entry-level employees. Clients are no longer willing to bear the costs associated with training large batches of fresh graduates. Consequently, companies are now restructuring their organizational frameworks.
CEO Ravi Kumar S’s Vision
Cognizant CEO Ravi Kumar S has confirmed these global shifts. During an earnings call, he stated that the company is transitioning toward a “broader and flatter pyramid.”
This model entails the integrated utilization of both digital and human labor—effectively combining human expertise with technology. In India, Cognizant’s primary offices are located in cities such as Bengaluru, Chennai, Hyderabad, and Pune.
