The number of employees at Cognizant drop to such levels in the second quarter that can be seen last at the end of the year 2018 as a massive cost-cutting program has been embarked upon by the company. The situation has led to the firing of almost 7000 employees.
On its roll, the company had 281,200 people as of June 30 which is quite something sequentially down from the figure of 291,700, and in the second quarter of the fiscal, it is 2.5% from 288,200. The figure for the quarterly annualized attrition scaled up to 24%, which is one of the highest figures that are there in the industry while the voluntary attrition has been only 11%. This implies that the rest of the 13% has been made redundant.
All the major IT companies saw a decline in the headcount in its last quarter because of the slowdown on account of lockdowns but none of them has been as high as that of Cognizant. TCS was down by figure 4,788.
In a conference call with financial analysts, Karen McLoughlin who is the outgoing chief financial officer said that there has been a decline in the net headcount by an approximately 2.5% year-over-year that roughly includes 7,000 associates who have exited under the plan of Fit for Growth. The increased rigor of the performance management process and all these cost actions are reflected in the annualized attrition rate 24% that has been elevated. The downward trend continued due to the voluntary attrition that has been seen by the company in the last four quarters has been approximately 11% in Q2.
In last year October, it has been announced by CEO Brian Humphries that the company is going to part ways with almost 13,000 employees that included 6,000 employees from the business of content moderation that is done by Cognizant for Facebook.
It has also been reported by TOI that hundreds of employees of Cognizant are very much affected due to actions that are performance-related.
The company’s plan for ‘Fit for Growth’ has envisaged charges for total restructuring with $170-200 million that is going to lead to an annual gross savings of $500-550 million.
On Thursday, Humphries also said that the bottom line is also needed to be protected by them and the team has to be optimized along with the bench that is around the revenue curve. This is the reason, why a disparity can be seen in recent quarters in the total attrition levels versus the involuntary levels or the voluntary attrition levels.