Cognizant to sell office assets in Bengaluru, Hyderabad for operational optimization
12 Dec 2023
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In a strategic move towards becoming asset-light, software services giant Cognizant Technologies is set to sell its office assets in Bengaluru and Hyderabad. The company aims to capitalize on non-core real estate as part of its broader plan to save $400 million over two years through a cost-cutting restructuring initiative.
As part of this plan, Cognizant intends to divest its 10-acre campus in Gachibowli, Hyderabad, and a 14-acre campus in Siruseri, Chennai. This move aligns with the company’s goal of vacating 11 million square feet of office space. The report also highlighted that Cognizant is re-evaluating its entire real estate portfolio, and surrendering rented properties in some regions.
It has also been reported that the company has, in certain cases, renegotiated rent agreements and downsized assets. This strategic realignment is crucial for Cognizant as it navigates its way through a cost-cutting restructuring plan.
Cognizant, known for assisting companies in modernizing technology and transforming experiences, reported a 16% drop in net profit to $525 million for the third quarter ending on 30 September 2023. Revenue, on the other hand, remained flat at $4.89 billion during the same period.
Ravi Kumar S., Chief Executive Officer of Cognizant, emphasized the company’s commitment to strengthening its fundamentals. He stated that they were investing to put Cognizant in the best position to serve clients as they strive to reduce costs, digitally transform their businesses, and embrace generative AI.
Despite the economic uncertainties, the company showcased positive indicators during the third quarter, including higher customer satisfaction scores, lower voluntary attribution, and continued growth in bookings.
Cognizant’s total headcount at the end of the third quarter stood at 346,600, reflecting a slight increase of 1000 from Q2, 2023, and a decrease of 2,800 from Q3, 2022. Jan Siegmund, Chief Financial Officer at Cognizant, noted adjustments in the full-year revenue guidance range due to recent discretionary spending pressure. The updated adjusted operating margin guidance is approximately 14.7%, representing the high end of the prior range and highlighting the company’s focus on enhancing operational discipline.
