Global IT major Cognizant, which has a big operation in India, is offering a voluntary separation incentive to some of its top-level executives. Cognizant, which had around 2.6 lakh employees as of December 31, 2016, did not disclose the number of employees who have been offered this voluntary separation option. A Cognizant spokesperson said it represents a very small percentage of its total workforce. “This voluntary initiative is being communicated to management-level associates-from director-level to senior vice president-and eligibility is at the discretion of Cognizant leadership,” the spokesperson said.
Cognizant said that as part of its plan to accelerate shift to digital, it is taking “taking steps to ensure that our workforce is appropriately aligned to deliver sustained, high-quality growth”.
“We continue to recruit and hire across all of our practices and are expanding facilities globally, ensuring that we have the right expertise to help our clients. As part of these initiatives, we are offering a voluntary separation incentive to some eligible leaders, representing a very small percentage of our total workforce.”
Cognizant had reported revenues of $13.49 billion, up 8.6 per cent year-on-year, in 2016.
Many IT companies are struggling with lower growth amid big changes in the technology landscape which is fast shifting towards new digital services. The tightening of the visa regime in many countries would also impact the IT companies’ margin, say analysts. (Read: Cognizant, other IT companies accused of gaming America H-1B visa lottery system)
Commenting further on the company’s digital strategy, the spokesperson said, “We’re focused on making sure that we have the team, capabilities and IP to serve our clients in the digital era. Doing so will make Cognizant even stronger and we are confident we are well-positioned to drive long-term shareholder value as we continue investing in our employees and in exciting new areas of growth for Cognizant and our clients around the world.”
Nasdaq-listed Cognizant had also lowered variable of employees for 2016. Commenting on the variable pay cut, a spokesperson had in March said, “Cognizant has a performance-based culture and our variable payout is a function of company and individual performance. In previous years where we outperformed our goals, we paid significantly above the target payout. In 2016, we missed our original goals and our variable payout is reflective of that.”