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The Teaneck, New Jersey-based company changed its revenue growth forecast earlier this month and said it was considering cutting jobs to cut costs. The company now expects its turnover in 2019 to increase from 3.9 to 4.9% in constant currency. It had previously forecast growth of 7.0 to 9.0% for the year.
"Our pyramid is very heavy. This does not mean that thousands of people will be fired, but that we can act quickly, "said Karen McLoughlin, chief financial officer at Cognizant, at a conference in New York.
Cognizant, whose growth in staffing exceeded revenue growth in the fourth and first quarters, will also facilitate future hires to align with revenue growth. While the company is taking steps to reduce costs, McLoughlin said his goal is also to bring in qualified talent.
"We just announced that in India, and for new graduates next year, we are taking wages up 18% and we will have a top salary in the industry," said McLoughlin. The freshest wages have not increased significantly in more than five years, even as companies strive to pay more for niche skills from the best universities.
She added that the company was also considering its variable compensation procedures to provide a "benefit" to existing employees. Under new General Manager Brian Humphries, who took office in early April, Cognizant will also expand its customer base. McLoughlin said about two-thirds of the company's reduced revenue forecast could be attributed to five health-care clients – four of which were merged, while the fifth was investing in IT spending.
"It is necessary to expand the client portfolio. We can not be in a position where one or two clients are blinking and that strikes the quarter, "said McLoughlin.
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