Business & Economy

1.2 lakh Employees say goodbye to Cognizant

Starting in 1994, Cognizant Technology Solutions Corporation made a bang on January 26th  all the way in Chennai. Cognizant has always been one of the top companies in the IT sector, especially with the number of employees it has. Also, it is a much-targeted platform for many out there. But recently, the shocking news of 1.2 lakh employees resigning in a very short period has astonished everyone. This is said to be a consequence due to the inefficient strategies implemented and unresponsiveness to problems by the CEO, Brian Humphries. Thanks to this, the CEO is in trouble; big time.

Of course, the CEO isn’t entirely to blame. As it may be evident, the corona pandemic catalyzed the number of resignations, entirely adding up to a humongous number of employees resigning at once. The attrition rate/churn rate (which is a measure of the number of individuals or items moving out of a collective group over a specific period) has risen incredibly up to 36% and made a mark in history. The total workforce of the company at present is 341,000 employees around the world.

After listening to this, the first question that comes up is “Why did this happen and what made so many employees resign?”. As mentioned by Moshe Katri (Managing director, Equity Research, Wedbush securities), they have observed and come across some troubling trends. These included the loss of crucial senior personnel and the inability to recruit experienced senior personnel, maintaining distance from large deals/ transactions, and so many more. To these observations made by Wedbush securities, Cognizant replied that they were speculations at best, according to an Economic Times report. Of course, the employees themselves were not very happy with their work experience at Cognizant too. Many complained that it was full of politics, mismanagement, fewer hikes, lack of good projects, unfriendly policies and so many other issues; they seemed to have their valid reasons. Overall, these mistakes cost Cognizant enormously: in a way no one ever imagined.

Looking at Cognizant as a whole, it is a huge organization. However, Cognizant is doing pretty bad compared to its competitors such as Tech Mahindra, Infosys, Hindustan Computers limited (more commonly known as HCL), Wipro and Tata Consultancy Services (TCS).  Let’s take a look at the headcount, previous attrition rate and present attrition rate of all these top companies.

Total headcount No. of employees added Previous attrition rate Present attrition rate Attrition rate- increase/decrease
Tech Mahindra 1,58,035 6,862 24% 22% Decrease by 2%
Infosys 3,35,186 21,171 27.7% 28.4% Increase by 0.7%
HCL 2,08,877 2,089 21.9% 23.8% Increase by 1.9%
Wipro 2,58,574 15,000 23.8% 23.3% Decrease by 0.5%
TCS 6,06,331 14,136 17.4% 19.7% Increase by 2.3%
Cognizant

 

3,41,000 600 31% 36% Increase by 5%

As clearly seen by the data, the numbers are not lying; a lot of people left, resulting in Cognizant in such an extremely high and unbelievable attrition rate. In addition, Cognizant’s attrition rate change is almost more than double and even triple the change of many other companies’ churn rate.

Whatever the reason or problem may have been that made Cognizant’s employees leave, the damage has been done. Cognizant Technology Solutions Corporation will face difficulties like no other and looks like they will have a lot of hurdles to go through without so much workforce all of a sudden. We will see how Cognizant reacts to this, how they fix this and truly see what waits for them in the coming days. Hopefully, they can cope up and hope that much damage hasn’t been done at the end of the day.

 

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