Info-tech

Cognizant sees sharp decline in employee numbers in 2020

TE Rajasimhan Chennai | Updated on February 18, 2021

While involuntary attrition increases, there’s a dip in voluntary attrition

Cognizant Technology Solutions saw a fall of nearly 3,000 in the number of employees in 2020, marking the steepest ever annual decline in its history. In the last decade, the number had declined just once before — in 2017.

The US-based IT company ended the year 2020 with 289,500 employees, of which 204,500 were in India.

For the three months ended December 31, 2020, the annualised attrition, including both voluntary and involuntary, was 19 per cent. In 2020, the company saw elevated levels of involuntary attrition, and decrease in voluntary attrition from historic levels in the early stages of the pandemic. All attrition is weighted towards more junior employees, says the company’s annual report.

Rajesh Nambiar, CMD, Cognizant India, said the decrease of 1 per cent in the global headcount in 2020 was owing to the ‘Fit for Growth Plan’, including the exit from certain content-related services.

On the positive side, the company closed the year with the second highest headcount in its history, having added 32,000 employees in the preceding two years. Cognizant hired over 17,000 fresh graduates from campuses in 2020, and expects to hire over 23,000 in 2021, up 35 per cent, said Nambiar.

“We are on track to bring in more new hires in the first quarter of 2021 than ever before as we ramp our hiring capacity to accommodate our growth plans for 2021 and beyond. India will continue to be one of our key hubs for talent acquisition,” he said.

 

State of transition

Cognizant is in a leadership and strategy transition and these numbers are indicative of that, said Kamal Karanth, co-founder, Xpheno, a specialist staffing solutions company. Much of its net reduction in full time employees is deliberate, he added. It wants to build a younger digital workforce and the projected number of freshers hiring for 2021 is a clear indicator of that, he further said.

The Cognizant leadership is driving more productivity and efficiency in its delivery organisation in general and India delivery centres in particular, observed Yugal Joshi, Vice-President at research firm Everest Group. Its management is realising that over the years the delivery organisation has witnessed nimbleness and agility going down and, to correct this, multiple initiatives are underway, he said, adding that the results of these initiatives are involuntary attrition as well.

Globally, the productivity growth is decelerating, and the India centres are no exception, said Joshi. Going forward, the existing tools and technologies used by delivery centres to drive productivity initiatives will not suffice and service providers need to rethink their models, Joshi added.

Published on February 18, 2021

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