Thursday, May 11, 2023

Cognizant launches $400 million in cost-cutting measures

Cognizant kicks off $400 million cost-cut plan

 BENGALURU: Ravi Kumar S, CEO of Cognizant, has started NextGen, a $400 million cost-cutting strategy. The plan calls for eliminating 80,000 seats and rationalizing real estate costs by cutting 3,500 non-billable roles, or 1 percent of the workforce. Following the declaration, Discerning's stock on Nasdaq flooded 7%.

In 2023, the company anticipates saving $350 million, while in 2024, it anticipates saving $50 million. About $200 million of these investment funds will come from representative severance and different costs connected with non-billable staff, and $200 million will come from office space combination. " We are reorganizing our actual workspace. We are living in a hybrid era of distributed work and lives. It will be crucial for us to be present in smaller cities. Numerous associates have relocated to tier-2 cities, and it is likely that they will continue to do so in the foreseeable future. We can maximize this area. "We don't think everyone will go back to work," Kumar stated.

In constant currency, Cognizant's revenue increased to $4.8 billion in the first quarter that ended in March, exceeding its guidance. It is the first time in history that it has planned for negative growth in 2023. It anticipates $19.2 to 19.6 billion in revenue for the year, representing a dollar growth of -1.2 to 0.8 percent and a constant currency growth of -1% to 1%.

Acquisitions are anticipated to account for approximately 100 basis points, or one percentage point, of this growth.

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