Cognizant to cut nearly 7,000 jobs; exit content moderation business
31 Oct 2019
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Global IT major Cognizant Technology Solutions (CTS) will be cutting as many as 7,000 jobs in the next few quarters and exit the content moderation business, which could impact another 6,000 employees, as it begins a strategic restructuring.
Teaneck, New Jersey-headquartered Cognizant will be removing 10,000 to 12,000 mid-to-senior level associates from their current roles, Brian Humphries, CEO of Cognizant, announced this during its earning call with analysts.
Of the 10,000-12,000 that will be removed, the company aims to reskill around 5,000 associates and redeploy them. This will result in around 5,000-7,000 employees eventually losing their jobs in the coming quarters.
“The gross reduction is expected to lead to a net reduction of approximately 5,000 to 7,000 roles (about 2 per cent of the company’s total population),” he said in the earnings call, adding that it is part of the company’s cost reduction plan.
The job cuts will affect more jobs in India as a significance majority of Cognizant’s employees are based in India. In September, Brian announced that CTS has over two lakh employees in India. This makes it the second largest IT employer after TCS, which has over four lakh employees in the country.
The cost reduction plan also involves exiting certain content work in the digital operations practice over the course of 2020. This will be the work that is done within the company’s digital operations service line. Exiting this business, the CEO says, will impact approximately 6,000 roles worldwide. However, Cognizant will work with its partners to move these employees to alternate vendors, to reduce the impact.
As part of the job cuts, Cognizant will exit its content moderation business. The company has been working with clients like social media giant Facebook in the content moderation work.
The company has been under fire for the impact the high-pressure job of content moderation for Facebook was having on the mental health of Cognizant’s employees. It has even led to the death of an employee, as per a Verge report.
Cognizant posted a net profit of $497 million for fiscal third quarter ended 30 September while its revenues rose 4.5 per cent to $4.25 billion. The IT major also raised its revenue growth guidance for the full year to 4.6-4.9 per cent in constant currency, up from the previous guidance of 3.9-4.9 per cent.
Cognizant is also reported to be looking to increase its focus on digital growth and increasing its investments in sales as part of its strategy to cut costs and boost revenues.
