Cognizant to hire more in US, optimise workforce

Chennai: US-headquartered Cognizant Technology Solutions (CTS), which has over a third of its workforce in India, has said it will rationalise its cost structure by bringing the employee base in line with demand. The company intends to ramp up hiring in the US while reducing dependence on the H-1B visas. In the last few months, all information technology (IT) majors have been under pressure after US President Donald Trump tightened visa norms.

During the earnings call for the first quarter of 2017, Raj Mehta, president, CTS, said the company hired 4,000 US citizens and residents in 2016.

“In 2017 and beyond, we expect to significantly ramp up our US-based workforce by hiring experienced professionals in the open market and by making more use of university, veteran, and related programmes,” he said.

Infosys recently announced that it would hire 10,000 locals in the US. Mehta added that for the recent filing period as on April 1, the company applied for less than half the number of visas it sought last year.

The senior management informed analysts that the move was not in response to immigration norms and was based on their clients’ needs.

“We are shifting our workforce largely in response to clients’ increasing need for co-innovation and co-location. While we will still seek visas for highly specialised and skilled talent, we’re reducing our dependence on these visas,” said Mehta.

As part of this shift, Mehta said they would continue to expand their US delivery centres. “Today, we have over 20 US delivery centres and we continue to expand this footprint. We are executing the shift to digital at scale by helping our clients simultaneously optimise their costs as they invest in the future. And we are shifting our workforce rapidly in the US with more US jobs and US delivery centres,” he said.

Cognizant has been under pressure from activist investor Elliot Management to optimise costs and focus on improving operating profit margins.

On Tuesday, CTS rolled out a voluntary severance scheme for D+ category employees — directors and senior VPs — giving them an option to exit the organisation on a cordial note by accepting either six or nine months’ pay as severance package, depending on their category.

The company’s plan to downsize has not gone down well with several employees.

On Thursday, 10 employees filed a petition with the assistant commissioner of labour in Chennai, accusing the company of forcing employees to resign. For the quarter ended March 2017, the company reported robust performance with a 10.7% year-on- year (y-o-y) growth in revenues at $3.55 billion. Its revenue grew 2.4% sequentially from last quarter’s $3.46 billion. Profits grew 26% y-o-y to $557 million from last year’s $441 million.