Cognizant to cut 13,000 jobs; exit some content moderation business

Mumbai - Facing backlash on social media and employee forums over the unhealthy working conditions of its employees in the content moderation business, Cognizant Technology Solutions Corp has decided to exit some contracts in the business.

The company's chief financial officer said this decision, which will reportedly result in termination of 6,000 employees, will have a negative financial impact on the company.

In a call with analysts, Chief Executive Officer Brian Humphries said the company had decided that work focused on determining whether content violated client standards was not part of its strategic vision. The work "can involve objectionable materials", he said.

The company came in for flak after reports emerged of some employees facing mental health issues due to exposure to content that was psychologically disturbing. Some media reports also mentioned unhealthy working conditions, and off-the-cuff policies related to review of employee work.

Cognizant will also lay off another 7,000 employees from their current roles and retrain 5,000 of them for deployment into other activities.

The cost-optimisation exercise is expected to be completed by the end of 2020, and will result in gross savings of $500 mln-$550 mln in 2021, the company said. It is likely to spend $150 mln-$200 mln on severance and facility exit costs.

Cognizant will increase its investments in data, digital engineering, cloud and internet of things, and also invest in sales and marketing, re-skilling of talent, acquisitions and partnerships, it said.

The company announced its earnings for the September quarter on Wednesday, and said it expects its sales to grow 4.6-4.9% on year in constant currency terms, up from 3.9-4.9% guided for at the end of the second quarter.

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