IT service provider Cognizant is looking to layoff senior level staff and this is likely to cost the company $35 million in severance cost even as second-quarter revenue missed expectations, reports ET.
In the second quarter, Cognizant's attrition was over 22% which the company attributed to internal as well as external factors like increased demand for experienced IT talent. In 2017, the company cut 4000 jobs and had offered voluntary retirement scheme to around 400 senior executives.
Cognizant president Raj Mehta told ET that this time they are targeting senior people and it is not voluntary.
"We want to weed out deadwood higher up in the pyramid so that the juniors can grow," says Mehta.
However, there is no word on the number of employees being targeted this time.
Mehta said the layoffs will be effected globally and is not being aimed at a particular region. Despite this, the company's headcount has increased in the second quarter by 7,500 to 2,68,900.
The company has also split the process for promotions and raises. Junior employees will receive promotions and raises in the third quarter while the seniors by the fourth quarter. For its financial year, Cognizant follows the January to December calendar.
Mehta said the appraisal process has started though he didn't say how much average hike the workers will receive. However, he said the company had a healthy margin to fund the promotions and raises.
The company reported revenue of $4.01 billion, an increase of 9.2% compared to last year but below $4.03 billion predicted by analysts.
Cognizant says it is targeting revenue of between $16.05 billion and $16.30 billion for the year, a growth of 8-10%. For the third quarter, Cogzinant expects revenue of between $4.06 billion and $4.10 billion.