The Indian IT sector has been resilient to global headwinds and trends in the tech sector, as Infosys, Wipro and HCL continue to operate without laying off employees. But the competition from the likes of TCS and Infosys is causing stress for Cognizant, which is headquartered in the US but operates largely in India.
According to reports, the tech major's new CEO Ravi Kumar S has announced plans to fire 3,500 employees and shut down offices to cut costs.
Negative news accompanies positive earnings
The shock for its workforce comes after the firm's earnings showed a 3 per cent uptick in profits, even though its revenue dropped marginally by 0.3 per cent.
The company with one of the lowest margins in the tech sector at 14.6 per cent, also expects to see a drop in revenues for 2023, according to Moneycontrol's report.
Apart from slashing its staff, Cognizant will also be vacating 11 million square feet of office space.
Workforce to be slashed following management change
Ravi Kumar S took over after the shocking termination of former CEO Brian Humphries and is tasked with a revival of the firm.
Cognizant has also stated that its former chief executive was fired without any specific reason.
The firm which now joins American peers which have laid off lakhs of employees, also sees India as an evolving global hub for tech.