Cognizant, the US-based multinational IT services company, plans to lay off 3,500 employees and reduce office space by 11 million square feet to cut costs, according to a recent report. CEO Ravi Kumar S unveiled the decision to let go of thousands of employees and cut back on office space to reduce costs and revive the company.

Cognizant faces stiff competition from Accenture, Infosys, and TCS. The company has also predicted that its revenues will decline in 2023. The report also highlights that the company’s margins are among the lowest in the industry, standing at 14.6%.

Layoffs and office space reduction to address cost challenges

Cognizant’s CEO, Ravi Kumar S, explained that layoffs and office space reduction are among the measures to address cost challenges. However, it is still unclear how many people in India will be impacted by the decision. Kumar spoke about the company’s Indian workforce, saying that he believes India will be the world’s technology talent hub for the next decade.

Transition of leadership

Cognizant’s former CEO, Brian Humphries, was terminated involuntarily, and the company announced this in its 2023 proxy statement. According to the statement, the board recognized the need for Cognizant to progress faster and accelerate revenue growth, which required a CEO transition. The company’s Chairman, Stephen J Rohleder, said that Humphries’ termination was without any specific reason.

Challenges in the tech industry

Cognizant is not the only tech company to announce layoffs recently. Wipro, Amazon, Accenture, Infosys, IBM, Google, Meta, and Twitter have also announced layoffs in the last couple of months. The tech sector is facing a tough time, with thousands of people looking for jobs after being fired, resulting in a highly competitive job market.

Conclusion

Cognizant’s decision to lay off employees and reduce office space highlights the challenges that the tech sector is currently facing. The company’s move to cut costs comes amid stiff competition and declining revenues. While Cognizant is optimistic about India’s potential as a technology talent hub, the job market remains highly competitive, with many individuals looking for new roles after being affected by mass layoffs in the industry.