Cognizant to Fire 3500 Employees, Company Revenue Declines by 0.3% 

Cognizant has announced that it will be firing around 3500 employees. This decision has been made public as part of the company’s first quarter 2023 financial results. The total headcount at the end of the first quarter was 351,500, a decrease of 3,800 from Q4 2022 and an increase of 11,100 from Q1 2022.  However, voluntary attrition of tech services displayed on a trailing-twelve-month basis, declined to 23% from 26% in Q4 2022 and 30% in Q1 2022.

"Our accelerated bookings growth in the quarter, which included several large deals and a healthy mix of new and expansion work, reflects the strengths of our services, our brand, and the longstanding relationships we have with our clients. I am also encouraged by the continuing reduction in our voluntary attrition," said Ravi Kumar S, chief executive officer, Cognizant. "Clients recognize how deeply we understand their businesses and how well positioned we are to create value for them at the intersection of technology and industry use cases. Having spent more than three months assessing the business, meeting with over a hundred clients and thousands of employees, I firmly believe Cognizant has a strong foundation for accelerating growth.”

Additional details of the financial results are that the company repurchased 3.2 million shares for $200 million during the first quarter under its share repurchase program. As of 31 March 2023, there was $2.6 billion remaining under the share repurchase authorization. In May 2023, the Company declared a quarterly cash dividend of $0.29 per share, a 7% increase year-over-year, for shareholders of record on 19 May 2023. This dividend will be payable on 30 May 2023.

Additionally, the company has launched the NextGen program, which will record costs of approximately $400 million with approximately $350 million of such costs anticipated in 2023 and approximately $50 million in 2024. This consists of approximately $200 million of employee severance and other costs primarily related to non-billable and corporate personnel, which will be mostly incurred in 2023, and approximately $200 million of costs related to the consolidation of office space, with approximately $150 million in 2023 and $50 million in 2024.