It appears that the Information technology company Cognizant Technology Solutions’ is not much behind in following the trends of cutting headcount.
Huge Decline In Cognizant’s Headcount in Q1
In a recent development, Indian IT major, Cognizant Technology headcount has declined sequentially year-on-year (YoY) during the two quarters in January-March.
There is this change which IT companies are following where they have stopped backfilling positions left vacant due to attrition in the recent past.
This seems to be affected by weak demand and also the higher rates of utilization.
As we know that Cognizant follows the calendar year, so its headcount has decreased by 3,300 sequentially and 7,100 YoY, ending with 344,400 employees in the first quarter of 2024.
After declaration of the results, the chief executive officer Ravi Kumar S said, “We have some capacity to continue to take care of our short-term needs. And as growth comes back in a more and more robust way, we will start to improve headcount,” in a media interaction.
Increase In Utilization Rate
Its peers in India including Tata Consultancy Services, Infosys, HCL Technologies, Wipro, and Tech Mahindra all together lost 69,167 employees in FY24 concerning the uncertain environment for demands.
In the case of other rivals such as Accenture, its headcount declined by 723 to 742,318 during the last reported quarter.
It appears that a substantial portion of the workforce of Nasdaq-listed information technology companies operates out of India.
So, their results matter as they serve as an indicator of the broader trends within the over 5 million-strong Indian IT sector.
In the meantime, Cognizant’s attrition rate reduced by 10 percentage points to 13.1 percent on a trailing 12-month basis.
Contrary to this, there is an increase in its utilization rate by 1 percentage point to 82 percent for the quarter ended March 31.
According to Kumar, Cognizant would first increase its utilization rate by 1-2 percentage points and then start hiring.
Besides this, Additionally, the Teaneck-based company’s headcount has not fallen in comparison with some of its peers.
So, the company’s metric was net positive in the past two quarters.
