As reports on global software major Cognizant laying off at least 400 Indian senior executives surfaced, the company on Wednesday said that in a people-intensive business, managing workforce utilisation is crucial to their cost structure.
Media reports also mentioned that the US-headquartered company has announced a voluntary separation package (VSP) for its US employees in the Covid-19 times.
In a statement, Cognizant said that effectively managing workforce utilisation is a key element of aligning its cost structure with revenue.
“We routinely manage supply and demand with a bench of unutilized employees. We are enhancing our bench policy by offering additional cash and extended health benefits to those who are or will become unutilised and for whom we unfortunately do not foresee future opportunities,” the company said in a statement.
The firm, which did not comment or verify number of employees affected in India, said that it treats any employees “exiting the business with fairness and dignity”.
The layoffs are part of the company’s realignment programme.
In November last year, Cognizant had said it would slash up to 7,000 jobs in the next few months as part of a cost-reduction programme.
In fact, the global software major in March this year announced an additional payment of 25 per cent of the base pay for April for employees up to ‘Associate level’ in India and the Philippines in the wake of the new coronavirus pandemic.
This applied to more than two-thirds of the India workforce.
Cognizant in February expanded its operations in Karnataka with a development centre at Mangaluru. The new 1,000 sq ft facility can accommodate more than 1,100 employees.
In Mangaluru, Congnizant employs nearly 600 people. As many as 28,000 people work for the company is Bengaluru and 700 in Mysuru.