Cognizant to cut up to 7000 jobs; exit content moderation business.

Over the next two years, Cognizant will focus on optimizing its core portfolio and invest in identified four areas - Data, Digital Engineering, Cloud, and IoT.

Cognizant, in an effort to streamline its cost structure and focus on optimizing its core portfolio, plans to cut about 5000 – 7000 jobs. During the post earnings conference call with analysts, Cognizant said that the cost cutting measures would lead to exit of about 10000-12000 mid to senior level employees from their current roles.

The company would look at re-skilling and redeployment of about 5000 of these, leading to a gross reduction of approximately 5000-7000 roles.

The company also has plans to exit the content moderation business, for social media clients. This move itself will impact about 6000 roles globally. The company said that they will be working with their partners to identify ways to transition the roles to other vendors to minimize any impact to the associates.

Over the next two years, Cognizant will focus on optimizing its core portfolio and invest to build on and extent its capabilities in identified four areas – Data, Digital Engineering, Cloud, and IoT. These areas appear to be critical to the company’s clients in the times to come. These areas need significant investments in technology, talent, sales & marketing, acquisition and partnerships and the company’s cost cutting efforts are directed to address these to ensure the company’s competitive positioning.

Cognizant announced its third quarter 2019 financial results on 30th Oct. The company’s Quarterly revenue rose to $4.25 billion, up 4.2% from the year-ago quarter, and Net income was $497 million compared to $477 million in the year-ago quarter.

In the company’s statements announcing the financial results – Brian Humphries, Chief Executive Officer said – “Over the past few months, we’ve sharpened Cognizant’s strategic posture and begun executing plans aimed at improving our competitive positioning.” The statement also said that the company is announcing the simplification of its operating model and a cost reduction program which will allow them to fund investments in the identified growth areas.