Indian origin IT service MNC Cognizant is planning for major layoff worldwide. The company will reportedly fire 12,000-15,000 employees, with the bulk of the layoffs expected in India. The company is said to expect to incur between $230 million and $320 million in severance costs under its newly announced project leap, without revealing the number of potential job losses. The company has more than 3,57,000 employees with most, over 2,50,000 based in India.
The experts cited that the possible reason behind the layoff is that clients are increasingly moving away from traditional pyramid heavy staffing models.
One of the executives stated that “Customers are not okay with full pyramids anymore and don’t want to fund training freshers,” highlighting a structural shift in how IT services are being delivered.
How the estimate is derived
The estimate is based on the back of the envelope calculations using typical salary and severance assumptions across geographies.
In India, the average annual salary is assumed to be around Rs 15 lakh. With severance typically ranging around six months of salary which means around Rs 7.5 lakh per employee. Applying this to a significant portion of the restructuring outlay suggests that the India impact alone could run into about 12,000 to 13,000 employees.
Whereas for higher cost areas such as the United States where average salaries are significantly higher which is around $1,00,000 annually.
With severance ranging between four to six months, the cost per employee rises to roughly $50,000, which means fewer employees can be impacted for the same level of provisioning. Planting these assumptions across regions yields a global estimate in the range of 12,000 to 15,000 employees.
As per media reports, these calculations are indicative and based on broad assumptions around the pay, tenure, and geographic mix, and the final number could vary depending on how the restructuring is executed.
Cognizant has been a place where thousands of young engineers started their careers. For many, it was their first job, their first salary, and their first step into the corporate world. But now, things are changing fast.
The company’s new plan, called Project Leap, is not just about cutting costs. It shows a bigger shift in the IT industry. Clients are asking for leaner teams. They want skilled workers, not large teams filled with freshers who need training. This is making companies rethink how they hire and manage employees.
Inside the company, there is uncertainty. Employees are worried. Some are waiting for clarity, while others are already preparing for the worst. The scale of the layoffs could be huge, especially in India, where most of the workforce is based.
At the same time, the company leadership is trying to explain the situation. Ravi Kumar S, while speaking after the quarterly results, said, “It’s a global programme… various parts of the organization will go through the process.” His words made it clear that no region or department is completely safe.
The numbers tell a serious story. The cost of severance itself runs into hundreds of millions of dollars. This shows how big the restructuring is. But these numbers represent real people, real lives, and real careers. For new graduates, this change is even more concerning. The old model, in which companies hired a lot of new graduates and trained them, is slowly going away. Now, companies want talent that is already trained and ready to work. However, the situation is not completely hopeless. The IT industry is changing, and new jobs are opening up in fields like AI, cloud computing, and cybersecurity. People who improve their skills may still be able to find work.
For now, though, the mood is tense. Employees are watching closely. The industry is changing. And for many, this could be a turning point in their careers.
Syed Ziyauddin is a media and international relations enthusiast with a strong academic and professional foundation. He holds a Bachelor’s degree in Mass Media from Jamia Millia Islamia and a Master’s in International Relations (West Asia) from the same institution.
He has work with organizations like ANN Media, TV9 Bharatvarsh, NDTV and Centre for Discourse, Fusion, and Analysis (CDFA) his core interest includes Tech, Auto and global affairs.
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