Bengaluru: Cognizant is reportedly planning a major global workforce reduction that could impact between 12,000 and 15,000 employees, according to a report. A significant portion of these potential layoffs is expected to take place in India, where the company has the largest share of its workforce.
The development comes as the IT major undergoes a broader restructuring exercise under its newly announced initiative, Project Leap. On April 29, Cognizant said it expects to incur between $230 million and $320 million in severance costs, though it did not officially confirm the number of employees who may be affected.
With a global workforce of over 3.57 lakh employees, including more than 2.5 lakh in India, the scale of the potential layoffs indicates a substantial organisational shift.
AI adoption and client demands driving change
Industry experts suggest that the layoffs are part of a larger transformation driven by evolving client expectations and the increasing adoption of artificial intelligence (AI) in service delivery.
Traditional staffing models in IT services, often structured like pyramids with a wide base of junior employees, are becoming less viable. Clients are now seeking leaner teams with more experienced professionals and are less willing to fund the training of freshers.
Executives quoted in the report indicated that customers prefer efficiency and outcomes over workforce size, pushing companies to rethink their hiring and deployment strategies.
Estimated impact in India
Based on internal estimates cited in the report, a large number of job cuts could occur in India due to cost dynamics. The average annual salary in India is estimated at around ₹15 lakh, with severance packages typically amounting to about six months’ pay, or roughly ₹7.5 lakh per employee.
Using these figures, around 12,000 to 13,000 roles in India alone could be affected. However, these numbers are indicative and may vary depending on how the restructuring is executed.
In comparison, employees in higher-cost markets such as the United States earn significantly more, with average annual salaries around $1,00,000. Severance payouts in such regions can reach approximately $50,000 per employee, meaning fewer layoffs would result in similar overall costs.
Strategic overhaul under Project Leap
The restructuring is part of Cognizant’s broader transformation strategy aimed at improving operational efficiency and aligning with future technology trends.
Speaking after the company’s recent quarterly results, Chief Executive Officer Ravi Kumar S described the initiative as a global programme affecting multiple parts of the organisation.
He indicated that Cognizant is moving towards a “broader and shorter pyramid” structure, reflecting a shift away from traditional workforce models. The company is also focusing on integrating “digital labour” — powered by AI and automation — with human talent.
Industry-wide trend
Cognizant’s reported move is part of a wider trend in the IT services industry, where companies are recalibrating their workforce strategies in response to technological disruption.
Automation, AI tools, and changing client priorities are reducing the reliance on large entry-level workforces. Instead, firms are prioritising specialised skills, domain expertise, and efficiency-driven delivery models.
This shift has implications not only for existing employees but also for fresh graduates entering the IT sector, as companies reduce hiring at the entry level.
Conclusion
While Cognizant has not officially confirmed the number of layoffs, the reported figures highlight a significant transformation underway within the company and the broader IT industry. As businesses increasingly adopt AI and leaner staffing models, workforce restructuring is likely to become more common, reshaping employment patterns in India’s IT sector and beyond.