Cognizant Latest News: Company Will Ask 400 More Executives To Leave
Here’s Cognizant Latest News, Company may ask around 400 executives to leave the firm as part of its realignment program
Around 400 executives holding the title of directors, senior directors, associate vice-presidents (AVPs), VPs and SVPs, would be asked to leave the firm, sources. This, they said, would be done in a staggered manner.
Two years ago, Cognizant laid off about 200 senior employees at the director level and above. The year before that, it offered a voluntary separation scheme to 400 senior employees. But CEO Brian Humphries clearly thinks there are still too many people in the middle and top.
This time around, the severance package has shrunk from 20 weeks pay to three months pay plus one-week pay for every year of service completed.
A cognizant spokesperson said, “In a people-intensive business like ours, effectively managing our workforce. And that is a key element of aligning our cost structure with revenue.
We have 290,000 employees serving clients worldwide. Like all services firms, we routinely manage supply and demand with a bench of unutilized employees.
Rod Bourgeois, the managing partner in US-based DeepDive Equity Research, said that prior to Humphries taking the helm, the company had become overly complacent – somewhat resting on its past laurels.
Cognizant Latest News, exercise is part of its realignment program to improve cost structure and delivery effectiveness. Under this program, in 2019, it incurred $22 million of executive transition costs (paid to leaders who leave the firm), $64 million in employee separation costs, $45 million in employee retention costs, and $38 million in third-party realignment costs.
“We anticipate that the employee separations completed as part of our realignment program will reduce our compensation expense by approximately $140 million on an annualized basis,” the company said in its 2019 annual report.
“We think these changes are causing a mix of wanted and unwanted attrition at senior levels of Cognizant’s organization. Wanted attrition has occurred in cases where staff were not sufficiently performing or serving as ideal role models for the rest of the organization.
Essentially, we think some senior-level attrition has been needed to push Cognizant toward a performance-oriented culture, pivot Cognizant’s skills toward digital, and better optimize its cost structure,” he said
“The reality is that Cognizant had stagnated since Gordon Coburn’s departure in 2016 and Elliott Management’s acrimonious exit in 2018, and Humphries has been “drinking from a firehose” since he joined to right the ship,” he said.
However, in Cognizant Latest News, Company said the base location of business heads is entirely incidental and has never been a consideration in decision-making. “We are proud to have been a truly global company throughout our more than 25 years of existence.
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