Preparation for layoffs at IT company Cognizant:15,000 employees will be laid off worldwide, most jobs will be lost in India

IT sector’s major company Cognizant is going to make significant cuts in its workforce, which could affect more than 15,000 employees worldwide. According to a Moneycontrol report, this layoff will see the highest number of employee job losses in India, which is being considered the biggest tech layoff of the year after Oracle and Amazon. Out of Cognizant’s total workforce of more than 3.57 lakh employees, 2.50 lakh employees work in India. However, the company has not yet announced the exact number of layoffs, but according to the report, between 12,000 to 15,000 jobs could be lost. India is the company’s largest workforce hub, so the impact is likely to be highest here. Company will spend over ₹3,000 crore on severance The company has estimated the layoffs based on the budget set under ‘Project Leap’. During the quarterly results announcement on April 29, Cognizant stated that it expects to spend between $230 million to $320 million (up to ₹3,040 crore) on severance costs (compensation given when removing employees). This includes compensation and other benefits to be given to employees. Average annual salary of employees in India is ₹15 lakh The average annual salary of employees in India is approximately ₹15 lakh. If laid-off employees are given severance pay equivalent to 6 months’ salary, then each employee will receive approximately ₹7.5 lakh. According to this calculation, the budget set by the company could cover the layoff of approximately 12,000 to 13,000 employees in India alone. Changing client preferences and new model Industry experts say that clients are now moving away from the old ‘staffing pyramid’ model, which relied on entry-level employees. Now clients are not willing to bear the cost of training large batches of new freshers. This is why companies are now changing their structure. CEO Ravi Kumar S’s Vision Cognizant’s CEO Ravi Kumar S has confirmed these changes being made worldwide. He said during the earnings call that the company is now moving towards a ‘broader and flatter pyramid’. This will involve using digital labour and human labour, meaning human effort and technology together. Cognizant’s main offices in India are in cities like Bengaluru, Chennai, Hyderabad, and Pune. What is a Severance Package? When a company terminates an employee without their consent, the amount given as financial assistance is called severance pay.