covid-19: Cognizant to retain digital talent in slowdown, anticipating recovery

MUMBAI: Cognizant will protect employees with digital skills from layoffs even if they remain under-utilised during the ongoing economic crisis, its chief financial officer has said.

The Teaneck, New Jersey-based IT services provider earns around 38% of its $16.8 billion revenue from digital businesses, which include helping clients shift applications to the Cloud, marketing online and on social media and building applications for smartphones and maintaining them at scale.

Karen McLoughlin’s comments come amid moves to shed employees as part of cost optimisation.

Cognizant announced a voluntary separation package for its US employees earlier in May wherein it would let go staffers who are not in active projects.

In October last, it said 7,000 jobs would be axed.

Staffers with digital skills are, however, likely to be spared through the recession brought on by the Covid-19 pandemic.

“Even if, for some reason, we have digital talent that becomes unutilized during this timeframe, assuming that they have the right skills and capabilities and so forth, we will protect that talent for the recovery,” McLoughlin said during a Bernstein conference

last week.

In its first quarter results commentary, the company had said it continues to see a strong pipeline for digital deals.

The ‘bench’ at many technology services companies, including Cognizant, has swelled with staffers from deferred or discontinued client projects.

McLoughlin said those with skills that are “fairly reasonably and easy to replace in the marketplace” are currently on the bench and they could opt for the package.

As part of the company’s “critical growth program,” most underutilised resources would be let go by the middle of the year, she added.

IT services companies faced significant attrition of employees with digital skills last year, as demand for professionals who could deliver work in areas such as cloud, analytics and cyber security shot up globally.

As more clients shift work to the cloud during the Covid-19 induced crisis, demand for people with such skills are on the rise.

Separately, McLoughlin said the number of its employees returning to offices will remain minimal. “We’re not anticipating a rush back into the delivery centres in India,” she said.

“We will start to pilot some return to work on a very, very small scale in one or two of our centres in India in the coming weeks. But we do not expect to have everybody in the centres anytime in the near future. We will continue to have most folks work from


As companies globally are starting to understand what the Covid-19 crisis entails, business visibility has improved for Cognizant, she said.

“What we’ve noticed in the last couple of weeks is a certain level of stabilization. I don’t want to certainly imply that we’ve returned to strong growth or anything like that. But you have seen companies start to understand a little bit about what their environment is going to be like…and then look for ways to drive savings into their business…but at the same time protect their transformation agendas.”


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