400 execs accept Cognizant’s VSP
Team Udayavani, Aug 7, 2017, 3:50 PM IST
New Delhi: About 400 senior executives of Cognizant have accepted the company’s voluntary separation package (VSP), a move that the US-based company said will help it save about USD 60 million annually.
In May, the company had initiated a voluntary separation programme, offering up to nine months of salary as part of it to some of its top-level executives in the US and India.
Cognizant has a significant chunk of its total 2.56 lakh workforce in India and it is estimated that of the 400 people who opted for the separation, a large number could be from India.
However, the company did not disclose the number of Indian executives who have accepted the offer.
“Of the USD 39 million of realignment charges, USD 35 million was for the roughly 400 associates who accepted our VSP. We expect approximately USD 60 million of annualised savings as a result of the VSP,” Cognizant CFO Karen McLoughlin said at a recent investor call.
She added that Cognizant expects to incur additional cost related to advisory fees, severance, lease termination, and facility consolidation costs in the remaining part of 2017.
McLoughlin said the company has also made “good headway” in the June quarter driving utilisation rates higher by “slowing the pace of our hiring and improving resource alignment” to its re-skilling and multi-skilling programmes.
She explained that these “adjustments” will help improve the company’s profitability.
Cognizant’s overall headcount decreased by about 4,400 people at the end of June from March 2017 quarter, even though it had hired 10,800 people (gross) during the June quarter.
“Our attrition level was higher than normal given reductions resulting from performance evaluations and the voluntary separation programme,” McLoughlin said.
She added that while the company will carefully manage headcount, it will continue to hire and invest in critical skills needed to grow Cognizant’s digital business.
The annualised attrition rate for Cognizant stood at 23.6 per cent, including BPO and trainees, during the June quarter from 17.1 per cent in the year-ago period.
“… we expect attrition to decline in the coming months,” she said.
The over USD 13 billion-Cognizant has also raised the lower end of its revenue outlook for the year and now expects its topline to grow 9-10 per cent, instead of 8-10 per cent growth expected earlier.
This confidence, it said, is based on the “strong first- half results” that were driven by robust growth in verticals like healthcare and digital services.
Cognizant President Rajeev Mehta said the company is investing “tens of millions of dollars” this year to continuously deepen and broaden skills in areas like analytics, artificial intelligence, data science, and digital security.
Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.
Top News
Related Articles More
IndiGo, Air India plan to purchase up to 170 wide-body planes in little over a year
Kotak Mahindra Bank shares tank 13%; mcap erodes by Rs 37,721 crore post RBI action
Four-day market rally makes investors richer by Rs 8.48 lakh crore
Kotak Bank barred from onboarding customers online, issuing fresh credit cards
Reverse migration has begun, says FM Nirmala Sitharaman
MUST WATCH
Latest Additions
My family faces threat from strangers who filmed inside my house: Neha Hiremath’s father
Indian-origin man shot, killed by San Antonio police amid attempts to apprehend him
Restored version of Shyam Benegal’s ‘Manthan’ to premiere at Cannes Film Festival
Aranthodu: Pillion rider killed in car-motorbike collision
Rahul Gandhi to address two public meetings in Karnataka today