Cognizant Technology, under pressure from activist investor Elliot Management along with other business headwinds, has offered a golden handshake to a select category of senior employees, reducing its wage bills. The company sent out mailers to its D+ category employees, giving them an option to exit the organisation on a cordial note by accepting either six or nine months' pay as severance package, depending in which category the employee sits.
Sources said, “There could be at least 1,000 colleagues who may be eligible to this.” A company spokesperson said, “We are offering a voluntary separation incentive to some eligible leaders, representing a very small percentage of our total workforce. It is related to our overall company strategy to accelerate our shift to digital and to deliver high-quality, sustainable growth.” Cognizant has been under the market's lens after its breakneck speed growth over the past two decades began to slowdown. It lowered its growth guidance thrice last year. For 2016, it registered revenues of $13.5 billion, up 8.6 per cent from $12.42 billion for 2015. For 2017, its revenue was estimated to be from $14.5 to $14.84 billion.
While directors are offered the nine-month packages, AVPs and SVPs will get the six-month deal. In a first, best performers only received 95 per cent of their variable pay for 2016, a major drop from the usual 150 per cent to 200 per cent they used to earn earlier. With over a third of its workforce in India, Cognizant has given over 100 per cent to top performing employees between 2009 and 2015.
