Is US-based IT major Cognizant considering a large-scale layoff that could affect more than 12,000 employees worldwide?
As per a Moneycontrol report, mass layoffs are being considered at the Nasdaq-listed IT firm, with a major impact on the employees in India. This comes after the firm reported a marginal decline in its consolidated net income to USD 662 million for the first quarter ended March 2026, down from USD 663 million in the corresponding period last year.
It has been reported that the company employs more than 3,57,000 people, with more than 2,50,000 based in India.
Timeline:
On April 29, Congnizant informed that it expects to incur between $230 million and $320 million in severance costs under its newly announced Project Leap. However, the number of potential job losses was not disclosed.
What is severance cost?
Severance cost is the compensation and benefits an employer provides to employees upon involuntary termination, such as layoffs, restructuring, or position elimination.
Experts also mentioned how customers are moving away from traditional pyramid-heavy staffing models, highlighting a structural shift in the IT services sector.
In India, the average annual salary is assumed to be around Rs 15 lakh and with severance typically ranging around six months of pay, this translates to roughly Rs 7.5 lakh per employee. If this is applied to the restructuring outlay, it suggests that in India, the impact alone could run into about 12,000 to 13,000 employees, mentioned the Moneycontrol report.
Cognizant chief executive officer Ravi Kumar S, after declaring the company’s quarterly results, signalled that the company is moving towards “a broader and shorter pyramid” and a model that combines “digital labour and human labour”.