One of the leading IT services firms, Cognizant, is reportedly considering major layoffs that could affect between 12,000 and 15,000 employees globally. Additionally, a large share of these potential job cuts is expected to occur in India, where the company has the majority of its workforce, according to a Moneycontrol report citing multiple sources. On April 29, Cognizant announced it expects to spend between $230 million and $320 million on severance under its newly introduced Project Leap.
However, the company did not specify how many employees might be impacted by the layoffs. With a global workforce exceeding 357,000, more than 250,000 of whom are based in India, the scale of this restructuring could be substantial, added the report.
Industry leaders indicate that evolving client demands are a key factor behind the shift. Traditional staffing structures, often built like pyramids with a large base of junior employees, are becoming less attractive to clients. “Customers are not okay with full pyramids anymore and don’t want to fund training of freshers,” one of the executives said in the report, highlighting a structural shift in how IT services are being delivered.
The projected number of job cuts is based on rough calculations involving average salaries and severance payouts across regions. In India, the typical annual salary is estimated at around Rs 15 lakh. With severance packages often equating to six months’ pay, this results in roughly Rs 7.5 lakh per employee. Applying these figures suggests that around 12,000 to 13,000 roles in India alone could be affected, according to the Moneycontrol report.
In contrast, employees in higher-cost markets like the United States earn significantly more, with average salaries near $100,000 annually. Severance payouts in these regions can reach about $50,000 per employee, meaning fewer job cuts would account for similar costs, it added.
When combined globally, these assumptions lead to an estimated total impact of 12,000 to 15,000 employees. However, sources in the report stressed that these figures are indicative and may change depending on how the restructuring unfolds.
Broader Transformation
“It’s a global programme… various parts of the organisation will go through the process,” Cognizant chief executive officer Ravi Kumar S said while addressing the media after declaring the company’s quarterly results last week.
The leadership has also hinted at a broader transformation in workforce strategy. Kumar noted that the company is moving toward “a broader and shorter pyramid” and a model that combines “digital labour and human labour”.
