The US-based tech giant Cognizant Technology Solution Corporation will cut around 7,000 mid-senior level employees jobs as part of a major restructuring process that will impact financial performance in the communication and media vertical. In addition to this, Cognizant also announced that it will exit its content moderation business, which will impact another 6,000 jobs. The IT major is one of Facebook's content review contractors.
The restructuring is part of the '2020 Fit for Growth Plan' that involves investment in technology, sales and marketing, reskilling, acquisitions, and partnerships to sharpen strategic positioning in key digital areas. The move is also undertaken to restore Cognizant to its former glory. The cost of the initiative was expected to be between $150 million and $200 million, primarily related to severance and exit costs, the company said.
In a post-earnings call, CEO Brian Humphries said as a part of organisational restructuring, the company had made the difficult decision to let go of more than 10,000 to 12,000 mid-to-senior level employees from their current roles. It was being done in part to optimise cost and also to invest in the reskilling and growth.
Hiring is slowing
The New Jersey-based company had said that it will slow down the process of hiring, anticipating muted spending in the banking sector to continue through the second half of the year. The company has been cutting down on its workforce and has made major changes to its senior management to help achieve its earlier target of annualized savings of $65 million in 2019.
For the third quarter ended September, the company registered a revenue of $4.25 billion, up 4.2 percent for the same quarter previous year. "The gross net reduction of employees will be 5,000 to 7,000 roles," Humphries said, explaining that around 5,000 staff would be reskilled and deployed. In the last few quarters, the company has shunned jobs and exited business not in line with its strategy.
Content moderation is one such business. In the earnings call, the management said, "Our work (in content moderation) is largely focused on determining whether certain content violates the client's standards and can involve objectionable materials. This is not in line with the strategic vision of the company."