Cognizant’s headcount drops by 10,500
The company had 281,200 people on its rolls as of June 30, down from 291,700 sequentially, and 2.5% from 288,200 in the second quarter of last fiscal. Quarterly annualized attrition moved up to 24%, one of its highest in the industry, while voluntary attrition was 11%. This means that the remaining 13% were made redundant.
Every major IT company saw headcount declines in the last quarter because of the lockdowns and slowdown, but none as high as Cognizant. TCS’s was down 4,788.
“Net head count declined approximately 2.5% year-over-year, including the roughly 7,000 associates exited under the Fit for Growth plan. These cost actions as well as increased rigor in our performance management process are reflected in our elevated annualized attrition rate of 24%. Voluntary attrition continued the downward trend we’ve seen over the last four quarters to approximately 11% in Q2,” said outgoing chief financial officer Karen McLoughlin in a conference call with analysts.
In October last year, CEO Brian Humphries had announced that the company would be parting with some 13,000 employees, including about 6,000 from the content moderation business that Cognizant does for Facebook.
TOI also recently reported about how hundreds of Cognizant employees had been affected due to performance-related actions.
The company’s `Fit for Growth’ plan envisages total restructuring charges of $170-200 million which would lead to annual gross savings of $500-550 million.
“We also have to protect the bottom line by optimising our team and our bench around the revenue curve. And that’s why you’ve seen in recent quarters a disparity between total attrition levels versus voluntary attrition levels or involuntary levels,” said Humphries on Thursday.
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