The job cuts will be initiated with a ‘voluntary separation’ program at the director level and above in June.
To keep the pyramid lean to improve its margins and accelerate revenue growth, Cognizant would be laying off at least 300 top executives. The NASDAQ listed company is said to have identified executives it will layoff in India, the US and other geographies, as per the report.
The company has initiated rationalization of its top deck with a ‘voluntary separation’ program at the director level and above for June. The program involves a generous severance payout of up to a year’s salary and other stock benefits based on the respective tenures of the employees leaving the company.
The voluntary separation program is for around 300 executives from about 3,00,400 executives holding the title of a director, including assistant vice-presidents and VPs. And as per the report, these executives have already been identified from various geographies including, India and the U.S.
These senior executives would be counseled and offered outplacement services as well.
The new CEO is taking a two-pronged approach—strengthening execution and improving the cost structure. These layoffs seem to be a consequence of such an approach.
A few weeks back Cognizant had announced that the job cuts will be focused on the middle levels, but now even the top executives will be laid off. When the company shared the realignment program in early May, is said that its headcount growth has outstripped revenue growth in the past two quarters. And job cuts seem to be of the ‘pyramid actions’ for lowering the cost of delivery.
The IT company looks forward to focus on getting fit for growth and providing opportunities for growth to their more than 285,000 associates around the globe.
Whenever any organization goes through cost restructuring, the jobs are first to get impacted. Especially in IT firms like HCL, Cognizant and IBM, layoffs are a usual drill. Last week, IBM sacked around three hundred employees from its services division. And this time at Cognizant it is the top executives who will get affected. How far will the outplacement services and counseling help the employees who will leave is uncertain but these measures are considered to be good means for them to find more opportunities and sustain their career.
Source- People Matters