IT firm Cognizant is readying another round of layoffs, expected to number a few hundred, as part of its strategy to cut costs, as per an ET report.
The development comes as new CEO Brian Humphries is spearheading a widespread restructuring aimed at boosting growth and lowering costs. In this direction, the company is also reportedly looking at increasing the variable pay component in the compensation structure of its employees in order to lower costs.
Earlier, the firm had also offered 300 top executives voluntary separation in order to keep its pyramid lean.
As per the ET report, the number of cuts is being evaluated and would depend on growth as the quarter progresses. The company has already suspended non-essential travel and taken other steps to curb spending.
The report also noted that the company has extended the time between giving offer letters to new employees and assigning their joining dates in order to maintain utilization and have lesser people on the bench.
The company has responded to ET that it had begun onboarding freshers from June. The firm had also earlier announced that it would be offering 20% more to freshers from next year in order to retain highly skilled talent from top universities.
It may be noted that Cognizant’s Q2 revenue came in at the higher end of its guided range and beat consensus EPS estimates. However, the focus of the new CEO is solidly on optimizing the utilization of unbilled people, institutionalize greater expense discipline, avoid unnecessary overheads, and. reduce the duplication of activities. It would be interesting to see how all these measures would help improve its margins.
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