Cognizant headcount drops by 4,400, attrition level higher than normal

The headcount at US-based IT firm Cognizant has dropped from 2,61,200 employees at the end of March, 2017 to 2,56,800 people in the June quarter. The reduction of 4,400 people has occurred owing to "performance evaluations" and "voluntary separation programme", the PTI reported.
"Our attrition level was higher than normal given reductions resulting from performance evaluations and the voluntary separation programme," Cognizant CFO Karen McLoughlin said on an earnings call.

The annualised attrition rate stood at 23.6 per cent, including BPO and trainees, during the June quarter. "While we will of course carefully manage headcount, we will continue to hire and invest in critical skills needed to grow our digital business. And we expect attrition to decline in the coming months," she said.

In May this year, Cognizant extended a "voluntary separation incentive" to some of its top-level executives, offering them up to nine months of salary.

There had earlier been speculations about layoffs in the company, but Cognizant President Rajeev Mehta had written to employees of the company assuring them.

"Each year, in line with industry best practices, we conduct performance reviews to reflect on the work of last year and ensure goals for the subsequent year are clear. We are being committed to being a meritocracy. We believe that's good for all associates around the world," Mehta in an email told the employees.

The IT company also denied speculations that such measures were undertaken to allow more hiring in the US. "We continue to hire in local markets around the world. We have been ramping up our recruiting efforts in US for a number of years and will continue to do so while hiring in most other parts of the world including India," the letter said.

The US-headquartered IT firm had earlier offered its top executives - directors, associate VPs and senior VPs - a voluntary separation package, a part of its plan to shift operations to automation and digital technology.

Meanwhile, US-based Cognizant has said its net profit has jumped over 86 per cent to USD 470 million during June 2017 quarter from the year-ago period, driven by strong growth in verticals like healthcare. This is against a net profit of USD 252 million in the April-June 2016 quarter, Cognizant said in a statement. The IT services major's revenues rose 8.9 per cent to USD 3.67 billion in the said quarter, meeting its forecast of USD 3.63-3.68 billion in topline for the second quarter.

(With inputs from PTI)