Cognizant axes 6,000 jobs in India, cuts variable pay
21 Mar 2017
Information Technology firm Cognizant, which has significant operations in India, is likely to cut at least 6,000 jobs, or over 2 per cent per cent of its workforce.
Nasdaq-listed Cognizant had approximately 2.6 lakh employees as of end-December 2016. The layoffs are part of the routine annual reviews to weed out non-performers, a company spokesperson said.
Cognizant has also cut variable pay for employees. "As part of our workforce management strategy, we conduct regular performance reviews to ensure we have the right employee skill sets necessary to meet client needs and achieve our business goals. This process results in changes, including some employees transitioning out of the company. Any actions as the result of this process are performance-based and generally consistent with those we've made in previous years," the spokesperson said.
The spokesperson clarified, "The numbers may bounce a percentage here or there, but this is part of our standard practice. At the same time, we continue to enhance our capabilities and hire for roles across all our practice areas in the company."
Commenting on the variable pay, the spokesperson 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."
According to NDTV, analysts say that many IT roles will become redundant due to the impact of automation on lower-end jobs. Many Indian IT companies are struggling with lower growth amid big changes in the technology landscape that is fast shifting towards new digital services.
Cognizant had earlier announced a plan under pressure from activist investor Elliott Management to return $3.4 billion to shareholders over the next two years through share buybacks and dividend (See: Cognizant bows to Elliot, agrees to return $3.4 billion to shareholders).
