Cognizant Technology Solutions (CTS) has laid off 200 senior level employees, giving them a compensation payout of three-four months, according to a report in The Times of India.
The move is a part of the company’s plan to align its talent pool to the newer digital requirements by bringing new skills on board. This may cost the firm about $35 million in severance during the rest of the year.
“As a part of our ongoing workforce management strategy, we ensure we have the right employee skill sets necessary to meet client needs and achieve our business goals. This process has resulted in changes, including some employees transitioning out of the company. We continue to enhance our capabilities and hire for roles across all our practice areas in the company. Details of severance or any other conditions of employment are confidential,” the company said.
According to the report, the entire process was completed in August.
The employees were asked to sign a mutual release agreement with the company which stated that they would not press a legal action against the company or its directors or its officers, some of the affected employees told the paper. The contract also stated that the employee has voluntarily entered into the agreement.
They added that the layoffs have left employees worried about how the rapid shift in technology is making skills redundant.
The company had slashed headcount by nearly 4,000 in 2017. It had also offered nearly 400 senior executives a voluntary retirement scheme, a move that the US-based company said will help it save about $60 million annually.
The company is looking to increase its global cloud workforce to facilitate rapid delivery of services.
“By year-end, we expect our global cloud workforce to exceed 20,000 associates. Today, about half of our current cloud-focused associates work in our digital systems and technology practice, which brings together applications, infrastructure, and security to help clients rapidly deliver new applications and services, support product development at scale, and shrink time to value from years to months,” Cognizant CEO Francisco D’Souza had said in the June quarter earnings call.