Cognizant Layoffs 2026: 15,000 Jobs at Risk
Cognizant, one of the top IT services firms, is reported to be preparing for a massive global staff reduction of up to 12k to 15k people, primarily in India. This is part of the company’s project (Project Leap) recently launched as part of their transformation efforts. It is to provide better services and meet new demands from clients.
Impact From Initiative Jump and Financial Impact
Cognizant announced in April 29th they are expecting to incur costs on Project Leap in the range of $230 million to $320 million. It is with approximately $200 million to $270 million of that attributable to severance and employee related costs. While there was no formal announcement verifying the layoffs, industry estimates suggest that the company is undertaking a substantial workforce realignment.
As Cognizant has over 357,000 people worldwide, more than 250,000 of whom work in India. It is likely that the majority of layoffs will occur there.
How Layoff Estimates are Determined
Layoff estimates are based on the number of estimated salaries (or severance) from a region. In the case of India, an estimated average salary is ₹15 lakh per year. Also, an estimated average severance is six months’ salary or ₹7.5 lakh for each employee. Based solely on these assumptions, industry analysts estimate that there are likely to be between 12,000 and 13,000 layoffs in India.
In the expensive regions of the U.S., with an average salary of about $100,000 a year, severance costs are much higher (approximately $50,000 per employee). This results in a lower number of impacted employees than will occur for equivalent financial distributions in less expensive regions.
Changes in the IT Services Delivery Model
This change represents a larger structural shake-up in the IT services industry. Clients are moving towards a shift away from traditional pyramid staffing models that rely heavily on hiring entry-level employees.
Industry leaders feel that businesses are no longer willing to invest in training new hires. Also, instead prefer to find experienced candidates who can join immediately.
In addition to Cognizant, others in the industry, such as Ravi Kumar, CEO of Cognizant, have voiced their support for a “wider and shorter pyramid.” So, this would combine digital and human resources.
The Anticipated Job Cuts in the Industry
The announced job losses at Cognizant are part of a broader pattern occurring within the IT Services sector today. Businesses are now looking closely at their structure. This is as they consider how to adapt to an environment impacted by decreased discretionary spending. Also, an increase in the use of automation and artificial intelligence to provide services.
Recent structural changes that have taken place this year at several of the world’s largest IT service firms such as Tata Consulting Services, Accenture, HCLTech, and Oracle also exemplify this trend of restructuring.
Going Back To Efficiency Looking at Cost Optimisation
Cognizant’s most recent cost optimization beginning in 2023/24 was called NextGen. Over 3,500 employees lost their jobs as a result of this initiative, along with a significant reduction in the amount of space occupied at its corporate office.
Latest news on Business world indicates that industries using automation and advances in technology are experiencing increasing productivity improvements. These improvements will ultimately lead to more efficient processes within the IT industry but are also representative of the impact that the evolution of hiring and employee dynamics will have on the availability of many entry-level positions and increased digital skills needed by job seekers.
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