Rajesh Nambiar appointed as chairman, managing director of Cognizant India

 

Cognizant has announced Rajesh Nambiar has been appointed as the chairman and managing director of its India arm and a member of executive committee with effective November 9.

He joins Cognizant from Ciena, a networking and software company, where he currently serves as Chairman and President of Ciena, India. Nambiar has extensive general management, commercial, and delivery experience includes more than 12 years with IBM and 18 years with Tata Consultancy Services previously. At IBM, Rajesh was the General Manager and Global Leader for IBM’s Application Services Business. He also served on the board of IBM India and as a member of National Association of Software and Service Companies (NASSCOM) Executive Council while at IBM.

“We are pleased to welcome Rajesh to Cognizant and our Executive Committee,” said Brian Humphries, CEO, Cognizant, said in a company statement. “In the repositioned and elevated role of the India Chairman and Managing Director, Rajesh will strengthen our brand positioning in India and enhance our relationships with relevant Indian government agencies, chambers of commerce, universities, the media, and key policy-making bodies, including NASSCOM. Rajesh will also serve as the Executive Committee representative of our nearly 200,000 associates in India. We are confident that his extensive industry and leadership experience will provide further momentum to our operations in India, which is a critical hub of Cognizant’s leading-edge delivery capabilities.”

“I'm honoured to be part of Cognizant and look forward to contributing to the company’s growth as a member of the Executive Committee. Cognizant’s technology and delivery capabilities in India provide an immense competitive advantage to the company and its clients,” added Nambiar. “My priority is to build upon Cognizant’s rich legacy of innovation, industry leadership, and client-centric employee culture to help the company engineer modern businesses that improve everyday life.”

Nambiar will be replacing Ramkumar Ramamoorthy, who resigned from his role in July, ending his 23 years of association with the IT services firm.

Cognizant withdraws full-year guidance for 2020 amid Covid-19 uncertainties

Cognizant Technology Solutions Corporation has withdawn the full-year guidance on its financial performance for the year 2020 amid uncertainities brought on by the Covid-19 crisis. The withdrawal comes on the back of falling client demand, expecially in the travel and hospitality space.

The compaany put first quarter revenue at $4.22-4.23 billion, up 2.7-2.9 per cent (3.4-3.6 per cent in constant currency) over the previous year's quarter. This included a negative 50-basis-point impact from the exit of certain content services.

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The company said today its financial performance during the first two months of the quarter was on track to exceed the previous guidance, driven by a strong show across the North American market. However, during the second half of March, Covid-19 increasingly affected its business causing delays in project fulfillment as delivery, particularly in India and Philippines, was being done on a work-from-home basis.

During the second quarter starting April, the company expects the pandemic to further reduce demand as Covid-19 will have a larger impact on society and the economy, causing broader disruptions across industries.

"The long-term fundamentals of our business remain strong. However, given the unprecedented nature of this crisis, the uncertainty about its duration and its impact on our ability to forecast performance, the company is withdrawing its 2020 guidance that was provided on February 5, 2020," Cognizant said.

On February 5, the company had put year-on-year revenue growth for the whole of 2020 in the range of 2-4 per cent in constant currency terms. This includes an estimated negative 110-basis-point impact from the exit of certain content services business it had announced earlier.

Commenting on the latest first quarter guidance, Brian Humphries, Chief Executive Officer said, "I am pleased with our business momentum in the first two months of the quarter and grateful for the dedication and professionalism of our associates in March, both of which enabled us to meet our previously announced revenue guidance."

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"In this fluid environment where uncertainty prevails, we are well-positioned with deep client relationships across more than a dozen industries, and a strong balance sheet that provides solid financial flexibility," he added. The company, which has 292,000 associates, acted fast to limit the impact of Covid-19 on its business by enabling work-from-home capabilities across its delivery teams, Humphries said.

In order to strengthen financial flexibility, Cognizant took steps such as drawing down $1.74 billion on its revolving credit facility on March 23, bringing the Company's total cash and investment balance as of March 31 to around $4.7 billion (which includes a $400 million in restricted time deposits in India), or net cash of $2.2 billion. The Company has no significant debt maturities until 2023. During the first quarter, it completed the acquisitions of Code Zero and Lev and repurchased approximately eight million shares. Since March 31, it has not initiated any new share repurchase schemes.

"We are confident that the combination of our strong balance sheet, and our robust operating and cash generative business model, will enable us to weather this disruption," said Karen McLoughlin, Chief Financial Officer. "The execution of our 2020 Fit for Growth program along with prudently managing our cost structure to react quickly to changes in the demand environment is critical to maintaining financial flexibility to navigate near-term headwinds while repositioning the business for long-term success."

The company has earlier announced that in India and the Philippines, Cognizant will offer staff at the associate level and below an additional payment of 25 per cent of base pay for the month of April. Cognizant has also offered 14 days sick-leave coverage globally for Covid-19 cases without impacting other sick leave or vacation programmes.

It has announced a $10-million philanthropic commitment to support communities around the world in addressing the pandemic's immediate and long-term impact. Cognizant and its US- and India-based foundations will provide critical resources to strengthen public health systems, education and workforce institutions, and the economic outlook of communities worldwide, the company said.

Cognizant plans to hire sales staff with specialised digital skill sets

Cognizant is aggressively hiring sales people proficient in digital technologies in its bid to win more deals in the new technology space.

The company, which is in the process of hiring around 500-strong sales team, has already taken staffers with specialist knowledge of working with SaaS (Software-as-a-Service) players. “Out of the 500 sales people (the company is hiring), a large proportion has digital skill set. So, we have sales specialist, who work with leading SaaS players like Amazon’s AWS, Google Cloud, Microsoft Azure,” said Malcolm Frank, president of Cognizant Digital Business. “We also have sales specialists with specific knowledge in IoT (Internet of Things).”

Frank also said deals coming in the digital space are not large ones, but are more project-based which grow with time. The Teaneck, New Jersey-based firm currently draws more than 35 per cent of its revenues from digital technologies and is witnessing a year-on-year growth of around 20 per cent in this segment. “We will definitely have a larger proportion of digital revenues, but we will still be doing a lot of systems (core revenue) work,” said Frank.

He also said the firm plans to hire or re-skill around 25,000 employees for cashing in the opportunities arising in the digital technology segment without divulging specific numbers.

Currently, Cognizant is pursuing its ‘fit for growth’ plan under which it is taking various cost-optimisation measures through which the company hopes to save around $150-$200 million by the end of 2020. The IT services firm is also rationalising its employee pyramid by hiring more fresh graduates. It had earlier said the company would remove 10,000-12,000 mid- to senior-level employees and redeploy about 5,000 of those impacted.

On Cognizant’s decision to exit the content moderation business, Frank said though it was a difficult decision, it was a step in the right direction. “While there are a handful of clients in the content (moderation) business, every firm is looking for digital solutions. So, the opportunity is quite big in digital (space).”

The IT firm last year decided to exit the content moderation business, which has an overall revenue impact of $240-270 million per annum. Cognizant, which beat street estimates with its fourth quarter performance, has projected that its revenues will grow by 2-4 per cent in the current year. Though this is the lowest growth projection among its peers, investors believe that the firm’s performance may improve.

Cognizant net profit falls 39% to $395 mn in Q3, expects growth at 2-4%

IT major Cognizant on Thursday reported over 39 per cent decline in net profit at USD 395 million for December 2019 quarter on account of factors like restructuring charges, and said it expects its topline to grow by 2-4 per cent in 2020.

The company also appointed Vinita Bali, former managing director and chief executive officer of Britannia Industries, as a new independent director, effective February 24, 2020.

The US-based company, which has a significant chunk of its workforce in India, had posted a net profit of USD 648 million in October-December 2018 quarter.

Its revenue grew 3.8 per cent to USD 4.3 billion during the quarter under review from USD 4.1 billion in the year-ago period. In constant currency terms, this translated to 4.2 per cent growth.

"Our steady progress against key initiatives is increasingly evident in our commercial and financial performance. We enter 2020 with renewed vigor and optimism," Cognizant Chief Executive Officer Brian Humphries said.

For the full year (2019), the company's net profit was down 12.38 per cent to USD 1.8 billion, while revenue was 4.1 per cent higher at USD 16.8 billion as compared with the previous fiscal.

Cognizant said it expects its March quarter revenue growth to be in the range of 2.8-3.8 per cent in constant currency, which includes a negative 60 basis points impact from the exit of certain content services business announced last year.

For 2020, revenue growth is estimated to be in the range of 2-4 per cent in constant currency, taking into estimate a negative 110 basis points impact from the exit.

"Our operating performance and strong free cash flows in the fourth quarter reflect the actions taken throughout 2019 to improve our cost structure and instill greater operating discipline across the company," Cognizant CFO Karen McLoughlin said.

The 2020 outlook reflects the company's commitment to further improve cost structure to fund investments in growth.

"We are executing a balanced capital deployment strategy that is focused on reaccelerating top-line growth through strategic acquisitions and other investments while returning capital to shareholders," she said.

In October, Cognizant had announced plans to slash up to 7,000 jobs in the next few months as part of cost reduction efforts. It had also said it would partially exit from content operations business and the move would impact another 6,000 jobs.

During the December 2019 quarter, Cognizant incurred USD 53 million in realignment charges, including USD 4 million in employee separation costs, USD 27 million in employee retention costs and USD 22 million in third-party realignment costs, it said in a statement.

For the year, it incurred USD 169 million in realignment charges that include USD 64 million of employee separation costs, USD 22 million of costs associated with CEO transition and the departure of the president, USD 45 million of employee retention costs and USD 38 million in third-party realignment costs.

During the three months ended December 31, 2019, Cognizant incurred USD 48 million in restructuring charges as part of its 2020 Fit for Growth Plan, that included USD 45 million in employee separation costs, USD 2 million in employee retention costs and USD 1 million in third party costs, it said.

The charges included USD 5 million of costs incurred in 2019 related to the company's exit from certain content-related services.

Cognizant appoints Walmart's Becky Schmitt as Chief People Officer

Cognizant on Friday announced the retirement of its Chief People Officer (CPO) James Lennox and appointment of Becky Schmitt, currently senior vice president and CPO at Sam’s Club, a $59 billion division of Walmart, as its executive vice president (EVP) and CPO. Schmitt will join Cognizant on February 1, 2020.

In a message to the employees, Cognizant CEO Brian Humphries said that Lennox, who has been the CPO, EVP, and member of the Executive Committee, had informed him four months ago that he planned to retire from Cognizant at the end of this year, after 16 years with the company. Lennox also helped lead the search for his successor, he added.

"To succeed Jim, I am pleased to announce that we have hired Becky Schmitt as our new EVP and Chief People Officer. Becky joins the Executive Committee, reporting to me, and will be based in New York City. She brings 24 years of experience in developing talent and designing and delivering modern, market-leading HR strategies globally," he said.

This experience includes more than 20 years with Accenture, during which she held an HR role in North America, in near-shore and offshore technology delivery centres, and in India delivery centers. While in Bengaluru, her work ranged from developing technology talent, globalising the SAP practice, and building the global technology architecture capability. Prior to her time in India, she managed HR functions for Accenture’s Asia Pacific Communications and High Tech business.

Currently at Sam's Club, she oversees the employee experience and career development of 100,000 associates across nearly 600 locations. Prior to that, she was the CPO for Walmart’s US e-commerce and corporate functions. Lennox will continue in the position until she arrives. He will continue to serve as an advisor to her for a brief period to ensure a smooth transition.

The number of associates in Cognizant has grown 19-fold to 290,000 now, from 15,000 associates in 2004 when Lennox joined the company.

"In our people-intensive business, all the value we create for our clients comes from having the most skilled and engaged talent. As our CPO, Jim’s been deeply involved in leading all aspects of people management on a vast scale, whether building our recruitment engine to attract world-class, diverse talent, developing a future-ready workforce through continual reskilling and multi-skilling, or strengthening and expanding our leadership talent pool," said Humphries.

Cognizant Sept quarter net up 4.1% at $497 million; to cut 12,000 jobs

IT major Cognizant on Thursday posted 4.1 per cent increase in net profit to $497 million for September 2019 quarter, and said it will slash up to 7,000 jobs in the next few months as part of a cost reduction programme.

The US-based company, which has a significant portion of its workforce based in India, had posted a net profit of $477 million in the year-ago period.

It has also raised its annual revenue growth outlook to 4.6-4.9 per cent for 2019.

Its revenue grew 4.2 per cent to $4.25 billion in the third quarter, compared to $4.07 billion in the year-ago period, Cognizant said in a statement.

The topline rose 5.1 per cent on constant currency basis, exceeding the guidance of 3.8-4.8 per cent revenue growth given for the third quarter.

The company has also raised the lower-end of its annual revenue growth guidance. It now expects its topline for the fiscal to grow 4.6-4.9 per cent in constant currency basis, from its previous expectation of 3.9-4.9 per cent.

It expects its October quarter year-on-year revenue growth to be in the range of 2.1-3.1 per cent in constant currency basis.

"Over the past few months, we've sharpened Cognizant's strategic posture and begun executing plans aimed at improving our competitive positioning," Cognizant CEO Brian Humphries said.

He added that the company is now announcing a simplification of its operating model and a cost reduction programme that will allow it to fund investments in growth.

Cognizant will remove about 10,000-12,000 mid-to-senior level associates worldwide from their current roles in coming quarters, it said.

The gross reduction is expected to lead to a net reduction of approximately 5,000 to 7,000 roles (about 2 per cent of its total headcount) and re-skilling and redeployment of about 5,000 of the total associates impacted.

"We expect the remaining 5,000-7,000 associates to exit the company by mid-2020 either through attrition or role elimination," Cognizant CFO Karen McLoughlin said.

The company has not detailed out the geographies that would be impacted by the reductions.

However, given that India accounts for the biggest share of the company's headcount, the impact of these layoffs is expected to be significant.

Cognizant's total headcount stood at 2,89,900 people at the end of September 2019 quarter. The company had recently stated that its headcount in India has crossed the two-lakh mark.

"Looking ahead, we see a clear path to unlock the organisation's full growth potential, win in our key digital battle-grounds, and return Cognizant to its historical position of being the bellwether of the IT services industry," Humphries said.

The optimisation of cost structure is expected to result in total charges of approximately $150-200 million, primarily related to severance and facility exit costs.

This is expected to result in an annualised gross savings run rate of approximately $500-550 million in year 2021, the company said.

Cognizant saw its financial services segment - which accounted for over 35 per cent of the company's revenues - posting 1.9 per cent growth in constant currency terms, while healthcare decreased 1.2 per cent.

Cognizant unveils restructuring plan; to reduce headcount by 7,000

IT major Cognizant, based in Teaneck, US, on Thursday announced a significant realignment in its current operations with plans to cut around 7,000 mid to senior level jobs apart from exiting its content business, expected to impact another 6,000 employees.

The company, which posted largely expected numbers for the third quarter ended September 30, unveiled these steps as part of its '2020 Fit for Growth Plan'. The Nasdaq-listed IT services firm, which competes fiercely with Indian IT services firms such as TCS and Infosys, has close to 200,000 employees located across 13 centres in the country which translates to around 70 per cent of its global headcount.

In the September quarter of 2019, Cognizant's net profit rose 4.1 per cent on year-on-year basis (YoY) to $497 million as compared to $477 million posted in the corresponding period of previous year. On a sequential basis, net profit declined by 2.4 per cent.

For the September quarter, revenues stood at $4.25 billion, a growth of 4.2 per cent YoY and 2.65 per cent when compared with the preceding quarter. In constant currency terms, revenues rose 5.1 per cent over the same period last year. Digital revenue growth came in the mid-20 per cent range in the third quarter and represented 35 per cent of the company’s total revenue.

For the whole year, Cognizant increased the lower end of its revenue guidance and said it was expecting its revenues to grow at 4.6-4.9 per cent in constant currency terms in 2019 as against its previous guidance of 3.9-4.9 per cent.

As part of its restructuring, Cognizant said it would remove 10,000-12,000 mid-to-senior employees from their current roles, and re-skill and redeploy about 5,000 of those impacted. Thus, the IT firm is likely to witness a net reduction of around 5,000 to 7,000 employees, either through attrition or role elimination. This accounts for around two per cent of its total employee base.

"Today, we are announcing a simplification of our operating model and a cost reduction programme, which will allow us to fund investments in growth. Looking ahead, we see a clear path to unlock the organization's full growth potential, win in our key digital battlegrounds, and return Cognizant to its historical position of being the bellwether of the IT services industry," said Brian Humphries, CEO, Cognizant.

Cognizant will also exit its content moderation business for clients such as Facebook, which will impact around 6,000 employees. "Exiting this area will impact an additional approximately 6,000 roles worldwide, though the company intends to work with its partners to explore ways to transition the roles to alternative vendors, thereby reducing the impact on associates," the IT firm said.

The exit from content moderation business would result in an annualised revenue loss of $240-$270 million for the company and impact its communication & media vertical.

However, Cognizant noted that all these business realignment moves would lead to significant cost savings for the firm next year. "The optimization of our cost structure is expected to be substantially complete by the end of 2020 and result in total charges of approximately $150-200 million primarily related to severance and facility exit costs," the company said. "This is expected to result in an annualized gross savings run rate of around $500-550 million in 2021."

In the September quarter, operating margin of the IT services firm expanded by 80 basis points in sequential term to 15.7 per cent. However, margin declined by 270 basis points on YoY basis.

Among business verticals, Cognizant reported a 1.9 per cent YoY growth in its financial services segment, which accounted for more than 35 per cent of its revenues. Revenue from healthcare, another key vertical, dropped 0.9 per cent during this period. Communications, media & technology vertical contributing 14.5 per cent of the company’s total revenues grew 10.6 per cent in constant currency on YoY basis.

In the just ended quarter, Cognizant’s employee attrition rate stood at 24 per cent, a rise of 100 basis points over the last quarter and 200 basis points over the same period of last year. Total headcount of the company rose 1,700 on net basis and stood at 289,900 by the end of September quarter.

Cognizant confident of growth, will hire more in India: CEO Brian Humphries

US-based Cognizant is confident of gaining the "bellwether" status in the IT sector as it bolsters its workforce across markets, including India, to meet the demands of clients that are investing increasingly on digital transformation, its chief executive has said.

Playing down any concerns around slowdown in demand, Cognizant CEO Brian Humphries told PTI that companies across sectors are increasingly looking at IT services not as a choice but as a fuel for growing their overall business.

"It's important to recognise that services companies like ours, sometimes regardless of the market environment, are addressing the needs of customers that increasingly view IT as the business and not as a choice or cost centre," he added.

Humphries, who took over the reins of the company earlier this year, said he has spent the past few months in marathon meetings with clients and employees.

"In the last few years, it has been said that we haven't reached our full potential, certainly relative to the heady heights of Cognizant's historical levels," he said.

He, however, added that it was his firm belief that Cognizant -- which has about 2 lakh employees in India -- is a "fundamentally healthy company" that has all the ingredients to reach its potential again.

"...and that's what I and my leadership team have been focused on... trying to unlock the potential for Cognizant to once again be the bellwether of the industry. I think we've got a great strategy, we've got great talent, and now it's time for execution," he emphasised.

Cognizant's revenue grew 3.4 per cent to $4.14 billion in the second quarter of 2019. For the July-September quarter, it expects revenue growth to be at 3.8-4.8 per cent in constant currency, while for the full year, the topline is forecast to grow by 3.9-4.9 per cent.

Asked if Cognizant was looking at job cuts and slower hiring, Humphries emphasised that there will be net addition in headcount.

"...there will be job creation in Cognizant in the years to come in India and internationally. The real story of Cognizant is a growth story. Our goal is to get back to basics and to accelerate revenue growth...we will take in more freshers each year. In fact this year, we have more than 30 per cent increase, versus the prior year," he noted.

Humphries said the the company is also partnering leading universities in India to train the workforce on new-age technologies like artificial intelligence, machine learning, Internet of Things and cybersecurity.

"In an organisation of 288,000, there will always be some reskilling, some re-balancing. But ultimately, I expect to have a net increase in headcount," he said.

On the opportunity in India, Humphries said the market should continue to grow rapidly for the company.

"...we're exploring how we can accelerate our investments in India and our commercial success in India. Our business here's a few hundred million dollars in size per annum... there's an opportunity for us to accelerate our business here in India... India sits within what's called our global growth markets, and that business should certainly hope to grow 20-plus per cent on a year over year basis," he said.

R Ramamoorthy appointed chairman and managing director of Cognizant India

IT major Cognizant has appointed Ramkumar Ramamoorthy as the chairman and managing director of Cognizant India

Ramamoorthy, who has been with the company for more than 21 years, played a leading role in developing many of the company's India-based portfolios, including marketing and communications, market research and intelligence, public affairs, and knowledge management. He also spearheaded the company's CSR initiatives through his work at the Cognizant Foundation and Cognizant Outreach, said that the company.

In the coming weeks, Ramamoorthy will establish a management committee and an operating committee for India. These committees will help the company further strengthen operations in the country.

Cognizant boosts bench strength of leaders after spur of high-level exits

A spurt of exits at the senior level has prompted Cognizant to boost its bench strength, so that senior executives can take over key verticals such as health care, banking financial service and insurance, and digital services.

Experts believe this is a step in the right direction for the Nasdaq-listed company to regain its competitive edge.

The latest entrants are Ganesh Ayyar, former chief executive officer (CEO) of Mphasis, and Jeff Heenan-Jalil, a former senior vice-president of Wipro’s health care business.

Ayyar joined Cognizant last month to head its digital operations. Heenan-Jalil, who was Europe CEO of IPSoft, will head the health care vertical at Cognizant.

CEO Brian Humphries, who took charge in April, has taken various measures to make the workforce more agile for a quick turnaround. Its employee pyramid is also being optimised to improve cost optimisation.

“The new CEO is bringing in experienced hands from the industry to provide stability and seasoned judgement. Though it’s early days to judge their performance, we have not seen clients abandoning Cognizant. In fact, there is substantial brand equity of the company among its client base,” said Peter Bendor-Samuel, founder and chief executive officer (CEO) of global research firm, Everest Group.

Among the high-level exits, three presidents of Cognizant — Debashis Chatterjee, Prasad Chintamaneni and Gajen Kandiah — have left the firm in the past few months.

Venkat Krishnaswamy, who was president of health care and life sciences, has retired from the firm during this period. More recently, Sumithra Gomatam, executive vice-president and president of digital operations, is also learnt to have resigned from the firm.

“A few high-profile exits is normal when a new CEO takes over. This was not alarming,” said Hansa Iyengar, senior analyst at London-based Ovum Research.

“It is normal for a few high-profile exits in the C-suite when a new CEO takes over and this is no way alarming. It is a wise decision to bring in external talent into the C-suite as it will infuse fresh ideas and a different way of looking at the business,” said Hansa Iyengar, senior analyst at London-based Ovum Research.

She added, “All these measures around reducing headcount, linking director level and above (executives’) compensation to performance are the first few steps to help it in its revival (of sorts).”

Cognizant plans another round of layoffs to slash costs, says report

Cognizant is readying to let go of a few hundred employees, as it plans another round of layoffs as part of its strategy to slash costs, the Economic Times reported on Friday, citing sources with knowledge of the matter. Further, the report said that more ways of cutting spending were on the anvil at the IT major.

A source with knowledge of the matter told the financial daily that this was part of the appraisal process, which was "getting stricter". The source said, "If you were a marginal performer or have not been allocated (a project), then they would look at beginning a separation process." According to the report, the number of layoffs would be in a few

hundred, and employees who have more than eight years of experience would be targeted.

As reportedly recently, Cognizant is exercising "tighter control" over expenses through a number of measures, including a slower pace of hiring and reduced travel expenses, as the company looks to re-invest in talent and digital solutions to drive growth. The US-based company told news agencies that it took "targeted actions" at senior-level executives in the second quarter, in a move that is expected to result in $65 million of annualised savings.

"...in the second quarter, we took targeted actions at the senior levels of our pyramid to simplify our organisation structure. These actions are expected to result in $65 million of annualised savings with approximately half of that to be realised in the remainder of 2019," Cognizant CFO Karen McLoughlin said at a recent earnings call. She added that in the next two quarters, the company expects to further reduce overall costs through a number of actions. 

A Cognizant executive also told ET that the number of layoffs was being evaluated and that it would depend on growth as the quarter progresses. Further, the report said that the IT major has already suspended non-essential travel and taken other actions to cut spending.

Cognizant had slashed its revenue growth forecast earlier this year, and said that its headcount addition had overtaken its revenue growth, which had led to narrowing margins, the report said. The company had 288,200 employees as of June 30, which was a seven per cent increase from 268,900 a year earlier. Further, citing Cognizant's annual report for 2018, the report said that the company had close to 281,600 employees at the end of 2018, out of which 194,700, or 69 per cent, were in India.

At the same time, an unnamed source told ET, the company has increased the time between giving of offer letters to new employees and assigning their joining dates. The source added that the company was looking to balance the work it has with the staff strength. "The joining dates are being calibrated to ensure that utilisation is maintained. There is a strong focus on cost control," the source told ET. On a Facebook group called 'Cognizant Freshers', a group of people have said that they were given offer letters in March, but were yet to receive a joining date, added the report. 

"We cannot be commenting on every speculation in the marketplace. It would be important to note that Cognizant's Q2 revenue came in at the higher end of our guided range and beat consensus EPS estimates," a Cognizant spokesperson told ET through email. "We have already onboarded several thousand students who are currently undergoing training in Cognizant Academy, and the rest will be onboarded in a staggered fashion, as is the process every year. Cognizant has a long history of honouring all campus offers and there is no reason to believe that this year will be any different," the spokesperson added. The financial daily reported that the company had said that it had begun onboarding freshers from the month of June.

Last week, it was reported that Cognizant might increase the variable pay component in its employees' compensation structure.

According to reports, the company is restructuring itself under the new CEO, Brian Humphries. This includes reducing the management layers and rethinking its sales and business strategy. Reworking the compensation structure is another measure in a roadmap aimed at making the company 'fit-for-growth'. Earlier, Humphries had said that changes to compensation were being considered.

Cognizant may hike variable pay component in move to lower costs: Report

Cognizant, the Teaneck, New Jersey-headquartered software services major, may increase the variable pay component in its employees' compensation structure, the Economic Times reported on Tuesday, citing sources in the know. The move is being mooted as the IT services firm moves to cut costs and possibly shore up margins, added the report.

The company is restructuring itself under the new CEO, Brian Humphries, said the report. This includes reducing the management layers and rethinking its sales and business strategy. Further, according to the report, reworking the compensation structure is another measure in a roadmap aimed at making the company 'fit-for-growth'. Earlier, Humphries had said that changes to compensation were being considered, added the report.

A source with knowledge of the deliberations told the financial daily that at present, the variable pay was a smaller component of compensation. However, the idea is to increase the variable pay to actually reward growth and contribution. "It could be 35 per cent or more in mid-levels, but it won't be significantly higher for freshers, who are on a low base," added the source.

The financial daily reported that a Cognizant spokesperson said, "Aligning compensation to key strategic focus areas like digital is a critical enabler for us and this is a process we are being very deliberate about and spending significant time and effort working on."

On August 2, despite posting largely in-line second-quarter numbers, the IT services major further revised its revenue growth downwards for the whole year as the company continues to pursue cost optimisation measures.

As reported earlier, for the whole year, Cognizant guided for a revenue growth in the range of 3.9-4.9 per cent in constant currency terms, which was lower than its previous guidance of 3.6-5.1 per cent issued in May.

According to the report, for the second quarter ended June 30, the company posted a growth of 11.6 per cent in its net profit to $509 million, as compared to the corresponding period in the previous year. The revenue, at $4.14 billion, grew 3.4 per cent year-on-year, while in constant currency terms, the growth rate was 4.7 per cent.

The report added that the company had said that it was planning to hire more than 500 customer-facing and sales support professionals, who would help the company expand existing accounts and generate new ones in the coming quarters.