New Delhi23 minutes ago
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IT sector giant Cognizant is going to make a major cut in its workforce, which may affect more than 15,000 employees worldwide. According to the report of Moneycontrol, the maximum number of employees will lose their jobs in India in this layoff, which is considered to be the biggest tech layoff of this year after Oracle and Amazon.
Of Cognizant’s total of more than 3.57 lakh employees, 2.50 lakh employees work in India. Although the company has not yet announced the exact number of layoffs, but according to the report, between 12,000 to 15,000 jobs may be lost. India is the company’s largest workforce hub, so the impact is likely to be greatest here.
Company will spend 320 million dollars on severance
The company has estimated the layoffs on the basis of the budget decided under ‘Project Leap’. During its quarterly earnings announcement on April 29, Cognizant said it expected to spend $230 million to $320 million on severance costs. This includes compensation and other benefits given to employees.
Average annual salary of employees in India is ₹15 lakh
The average annual salary of employees in India is around Rs 15 lakh. If the retrenched employees are given severance pay equal to 6 months’ salary, then each employee will get approximately Rs 7.5 lakh. Accordingly, the budget set by the company can cover the layoff of about 12,000 to 13,000 employees in India alone.
Changing preferences of clients and new model
Industry experts say clients are now moving away from the old ‘staffing pyramid’ model, which relied on entry-level employees. Now clients are not ready to bear the expense of training a large batch of freshers. This is the reason why companies are now making changes in their structure.
Vision of CEO Ravi Kumar S
Cognizant CEO Ravi Kumar S has confirmed these changes being made across the world. He said during the earnings call that the company is now moving towards a ‘broader and smaller pyramid’.
In this, digital labor and human labor i.e. human labor and technology will be used together. Cognizant’s major offices in India are in cities like Bengaluru, Chennai, Hyderabad and Pune.
What is a severance package?
When a company fires an employee without his consent, the amount given to him as financial assistance is called severance pay.
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