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Why did Cognizant lay off over 3,500 employees?

Cognizant expects its revenues to decline in 2023, highlighting the challenges faced by the IT services industry which relies heavily on the US market.

The company will lay off 3,500 employees and reduce office space to cut costs 


CEO Ravi Kumar S has been tasked with reviving the Nasdaq-listed IT major, which competes with Accenture, TCS, and Infosys


While Cognizant is listed in the US, most of its operations are based in India 

The company provided a revenue guidance of $19.2 - $19.6 billion for the full year, with a growth range of -1.2% to 0.8% in reported terms or -1% to 1% in constant currency 

For the second quarter, Cognizant guided for a revenue band of $4.83 - $4.88 billion, with a decline of 1% to flat in constant currency

Cognizant's margins are among the lowest in the IT industry, comparable to Tech Mahindra 


The company has guided for an adjusted operating margin of 14.2-14.7% for the full year 

Cognizant plans to give up 11 million sq feet in office space to cut costs and boost margins

The cost-cutting measures come amid increasing pressure on IT companies to improve their margins and manage costs 

Cognizant will also invest in areas such as digital engineering, cloud, and data to drive growth in the future

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