Cognizant Has Already Fired 7000 Mid, Senior Level Employees; 5000 Will Be Reskilled
As a part of the “2020 Fit for Growth” plan announced last year in October, Cognizant was to fire 12,000 mid to senior-level employees, of which 5,000 would be reskilled and reassigned and the remaining 7,000 would leave the company by mid-2020.
Now, in October 2020, Cognizant said it has completed its controversial plan.
Read on to know more about the plan and how it was executed…
What Exactly Happened in the Past 1 Year!
“Our 2020 Fit for Growth Plan is expected to run for two years. This program is designed to simplify the way we work, reduce our cost structure, and fund investments in the business which will enable growth,” the company had said last October in an earnings call.
The plan aimed at an annualized gross run-rate savings of $500 million to $550 million in 2021.
This plan had created a huge stir among the IT unions. Although, the industry leaders Moneycontrol then spoke to highlighted that it was inevitable.
The stir was amplified by the layoff of FITE’s union member Elavarasan Raja. Forum for IT Employees (FITE) members planned to meet Tamil Nadu labor and employment department’s officials and claimed that Raja was fired for being a part of the union.
Amidst the controversial rage, Cognizant didn’t budge an inch and continued with its plan.
Cognizant reportedly was also planning on firing its bench employees which led to FITE writing a petition on June 12, 2020, to the Chennai labor commission and another letter dated June 22 to the deputy commission of labor, New Delhi about these layoffs.
FITE’s petition stated around 18,000 employees on the bench and over 27,000 employees with poor performance ratings were at the risk of layoffs.
In July, Cognizant had said in an official statement that these layoffs were based on performance and the numbers stated were inaccurate and not factual.
In Q2 of FY2020 (the company follows a calendar year for fiscal) the net headcount that left the company under the plan was 9000 and in Q3 of FY20, the number rose to 10,000.
The total employee count in Q3 FY19 2,89,900 (when the plan was announced) as opposed to 2,83,100 in Q3 FY20. In other words, a net drop of around 6,800 in the employee headcount can be seen. Meanwhile, the company had also hired fresher and laterals.
The company had completed the majority of its objective for the “2020 Fit for Growth” plan by the end of September 2020, said Cognizant in its earnings call after its Q3 results. According to Cognizant’s Q3 report, the company has witnessed the target of $520 million to $550 million in annualized gross savings.
Furthermore, as a part of this restructuring plan, Cognizant also egressed its $250 million content moderation business which resulted in 6,000 employees being laid off.
What Are Cognizant’s Future Plans?
After a key transformational restructuring strategy, Cognizant is planning on aiming for the overall growth of the company.
During the earnings call, CEO Brian Humphries said, “While we continue to have a lot of work ahead of us, we are encouraged by our progress.”
He added, “…we’re excited about our strengthening competitive position, the opportunity to expand internationally and the opportunity presented by the third phase of digital. So we’ll be several big winners in this attractive market, and we aim to be one of them.”