India back as key delivery centre for Cognizant
Under new CEO Ravi Kumar regime, attrition rate decreasing as resigned staff staging homecoming
image for illustrative purpose
Bengaluru India is slowly regaining its importance as a critical delivery centre for Cognizant under the new CEO Ravi Kumar, which was under-appreciated during the previous CEO leading to multiple senior level exits apart from rising employee attrition numbers.
Experts are of the opinion that operations in Indian centre is stabilizing, which is getting reflected in falling attrition, less senior level exits along with improving performance of the Nasdaq-listed firm.
“Ravi Kumar has been very clear to emphasize the importance of India and demonstrate it by showing up in India on a frequent basis. The Indian business is returning to the centre of Cognizant strategy and culture. Though these are early days, but so far, the indications are very positive. Moral has risen around the world, particularly in India which under the old leadership felt under appreciated. Attrition is down and some of those who have left are seeking to return to the company,” Peter Bendor Samuel, CEO of, Everest Group, a global consultancy firm, told Bizz Buzz.
Announcing its second quarter performance, Cognizant reported a decline in its employee attrition to 19.9 per cent on 12-month basis as compared to 23.1 per cent in the previous quarter.
The IT major, which has its majority of its employees operating out of India, saw its attrition levels touching close to 36 per cent post the pandemic. Apart from high demand for technology demand, then Cognizant management’s approach to Indian delivery centre was cited as a major factor for high employee turnover.
However, post Ravi Kumar’s taking over the role of CEO, Cognizant is slowly giving more importance to India as the most critical delivery centre for the company.
In the second quarter ended June, Cognizant was able to beat street expectations despite a tepid demand environment. Experts opined that the company was facing low morale issues, which are now being addressed by the new management.
“Cognizant beat street expectations. The deal pipeline is improving, but most importantly, internal moral is improving dramatically. Cognizant is still a strong firm, but was hamstrung by poor employee morale which is a cancer that eats away at performance. With his focus on people, Ravi Kumar has quickly turned this around,” Bendor Samuel added.
During the June quarter, Cognizant won five large deals of $100 million - two renewals, two new customers and one customer was a ramp up and expansion of an existing partnership. It also announced $1 billion in generative AI investments over the next three years.
However, brokerage firms flagged concerns regarding slow growth in top line despite winning good number of large deals as revenue conversion remained low owing to slow pace of project execution.
Similarly, operating margins are likely to remain under pressure in the near-term as company undertakes its NextGen programme to optimise operations and cost.
