Cognizant begins ‘voluntary separation’ program for senior staff: Report
Cognizantis said to have identified senior employees including directors and above who are going to be part of its ‘voluntary separation package’.
- The package is likely to offer a year’s salary and some other benefits.
The packages are intended to save annual costs and help the company increase revenue.
Earlier this month, Cognizant hinted at job cuts while announcing a “ realignment program.” “As part of our realignment program, management is currently evaluating various strategies, including additional employee separation programs. The timing, nature and magnitude of these initiatives are not finalized at this time,” said the company at the time.
Under the separation program, the company will further “rationalise senior executives holding the title of director including assistant vice president and vice president,” according to the TOI report.
The package will likely include the offer of 12 months salary and stock benefits depending on the tenure of the employee. The executives will also be offered an outplacement service following counselling.
Cognizant had 281,600 employees worldwide in 2018 and a large chunk of its total employees (nearly 194,700) works in South Asia country. It is estimated that the company has already identified the executives - who are going to be the part of voluntary separation — from India, the US and other geographies. However, it is yet to disclose the number of employees who will be part of the programme.
According to reports, the company’s newly appointed CEO Brian Humphries is looking to ‘strengthen execution and improve cost structure’ after the company revealed its Q1 earnings earlier this month. It had slashed down its growth target to 5%, down from 20% for this year. Its first-quarter earnings of 2019 stood at $4.11 billion. The net income was $441 million compared to $520 million in the year-ago quarter.
The most recent move comes two years after it laid off 400 staff. In 2017, over 400 senior Cognizant employees had accepted the company’s voluntary separation package, which had helped the company save $60 million.
Cognizant hints at more job cuts while outgoing execs may take $25 million
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