Cognizant lays off 200 senior executives: Report

Last Updated: Thu, Oct 11, 2018 08:55 hrs
The Cognizant logo is seen at the SIBOS banking and financial conference in Toronto

A ToI report on Wednesday said Cognizant Technology Solutions (CTS) was laying off 200 senior level employees and offering a severance of three-four months. The severance package is expected to cost CTS nearly $35 million, but the company has said that it took the decision to hire fresh recruits.

According to the report, the entire process was completed in August.

"As a part of our ongoing workforce management strategy, we ensure we have the right employee skill sets necessary to meet client needs and achieve our business goals. This process has resulted in changes, including some employees transitioning out of the company. We continue to enhance our capabilities and hire for roles across all our practice areas in the company. Details of severance or any other conditions of employment are confidential," the company said.

The employees, the report says were asked to sign a mutual release agreement with the company. As part of this agreement, CTS employees were asked not to pursue legal actions against the company or its directors or its officers.

The contract also stated that the employees voluntarily entered into the agreement.

Cognizant's CEO Francisco D'Souza had been confident of his workforce, at least going by what he said in a June quarter earnings call. He said, "By year-end, we expect our global cloud workforce to exceed 20,000 associates. Today, about half of our current cloud-focused associates work in our digital systems and technology practice, which brings together applications, infrastructure, and security to help clients rapidly deliver new applications and services, support product development at scale, and shrink time to value from years to months."

This is not the first time that such a culling process has been initiated by CTS. 4,000 employees were rendered jobless in 2017.

And, some time ago, 400 senior executives were offered a voluntary retirement scheme, but later it emerged that Cognizant saved itself at least $60 million annually.

In the age of automation and Internet of Things, experts are still divided on how automation has gobbled jobs and rendered the brains behind it jobless.

In the race to sustainability and better agility, culling heads seems like the most immediate recourse IT companies are taking.