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Cognizant to lay off 3,500 employees as Q1 net profit up 3% YoY over two years.

Cognizant will reduce costs by firing 3,500 workers and giving up millions of square feet of office space.

According to Cognizant, its 2023 revenue projections are projected to be lower. This emphasises the current difficulties the business is facing, especially given that the US accounts for the majority of its revenue. Cognizant will reduce costs by firing 3,500 workers and giving up millions of square feet of office space in order to address this.

Ravi Kumar S, the recently chosen CEO, has a challenging task ahead of him: turning the company around and out-competing industry titans like Accenture, TCS, and Infosys. Despite being listed in the US, the company’s operations are primarily based in India.

For the entire year, the company predicts sales of $19.2–19.5 billion, or a decline of 1.2% to an increase of 0.8, or a decline of 1.0% to an increase of 1% in constant currency. The company expects revenue for the second quarter to range between $4.83 and $4.88 billion, a fall of 1.6% to 0.6% or a decline of 1% to flat in constant currency.

At 14.6%, Cognizant’s margins are currently among the lowest in the IT sector, matching those of Tech Mahindra. The company forecasts that its adjusted operating margin will be between 14.2 and 14.7% for the entire year.

Also read, Go First cancels flights at last minute and customers fume with anger.

Good first Quarter for Cognizant:

In the first quarter of FY23, which Kumar handled for the most of the time, Cognizant outperformed analyst estimates. On January 12, he succeeded Brian Humphries, who had been “involuntarily terminated” as CEO. The industry is experiencing various challenges at the moment, including a change in leadership and a new chairman of the board.

On an annual basis, Cognizant’s net profit increased by 3%, while sequential profit growth was 11.2 percent. The company’s revenue came in at $4.81 billion, down 0.3% from the previous year but up 1.5% in constant currency. This exceeded the forecast’s revenue estimate, which ranged from $4.71 to $4.76 billion.

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