Cognizant to cut 4,000 jobs amid AI push, slowing demand
What's the story
Cognizant Technology Solutions has announced plans to lay off around 4,000 employees, or nearly 1% of its workforce. The decision comes as the company faces slowing demand and shifts toward automation. The layoffs come amid the company's recent announcement of Project Leap, a transformation program that focuses on increased investments in artificial intelligence (AI), integrated digital offerings, and workforce upskilling.
Program details
Project Leap expected to save $300 million in 2026
Cognizant's Project Leap is expected to cost between $230 million and $320 million, including $200-$270 million for employee severance and other personnel-related costs. However, the company also expects this program to save up to $300 million in 2026. While not specifying the exact number of employees affected by the restructuring, Cognizant's management has said more than 20,000 freshers will join this year. This is the second round of layoffs under CEO S. Ravi Kumar, who took over in January 2023.
Market shift
Layoffs reflect broader industry trend
Cognizant's decision to cut jobs comes in line with a wider industry trend. Oracle Corp. laid off 19% of its workforce at the start of the year, while Tata Consultancy Services cut 2% of its workforce last summer. Cognizant reported a revenue of $5.41 billion for the quarter, a sequential growth of 1.5% and year-on-year growth of 5.8%. The company's net profit rose by 2.16% sequentially but declined by 0.15% year-on-year to $662 million.