US-based Information Technology (IT) company Cognizant may resort to more lay-offs, this time a few hundred, as part of measures to cut costs besides exploring ways to bring down spending, according to a media report.
Under the leadership of new CEO Brian Humphries, Cognizant has embarked on a major restructuring process aimed at accelerating growth and at the same time, lowering costs, said a report in The Economic Times.
As part of the lay-off, a few hundred employees in the middle level with more than eight years of experience may be handed the pink slips, said the report.
If the lay-off happens, then it will be yet another round of retrenchment. Cognizant ousted its middle-level executives in May this year as part of its strategy to bring down costs and revive growth.
The US-headquartered company, which has a significant portion of its employees based in India, will opt for job cuts as the firm’s headcount additions were not in sync with the revenue growth in the past two quarters.
Cognizant was exercising "tighter control" over expenses through a slew of measures, including a slower pace of hiring and reduced travel overheads as the IT major looks to re-invest in talent and digital solutions to drive growth, reported PTI.
The IT major said it took "targeted actions" at senior-level executives in the second quarter—a move that is expected to result in $65 million of annualised savings.
"...in the second quarter, we took targeted actions at the senior levels of our pyramid to simplify our organisation structure. These actions are expected to result in $65 million of annualised savings with approximately half of that to be realised in the remainder of 2019," Cognizant CFO Karen McLoughlin said at a recent earnings call.
In May this year, Cognizant, which has close to two lakh employees in India, had decided to hand out over 18 percent higher pay packages to entry-level engineers who will be joining next year.
Engineering students graduating in June 2020 would see the offer made by the company increase from Rs 3.38 lakh per annum to Rs 4 lakh, PTI reported quoting industry sources.
A Cognizant spokesperson had confirmed this and said the company already offered higher packages for employees with "premium" skills in digital technologies.
According to placement officers, Cognizant usually hires about 15,000-20,000 freshers on an average every year. The entry-level annual salary for graduate engineers is currently around Rs 3.30-3.60 lakh.
— With PTI inputs
Updated Date: Aug 16, 2019 16:50:41 IST