Cognizant Technology Solutions Corp., a leading global IT services company, has been grappling with a high attrition rate that has surpassed its competitors.
The company’s voluntary attrition rate for the 12 months leading up to December 2024 reached 15.9%, significantly higher than that of its peers, including Tata Consultancy Services Ltd (13%), Infosys Ltd (13.7%), and HCL Technologies Ltd (13.2%).
This detailed report delves into the reasons behind the high attrition rate, the impact on the company.
Reasons Behind the High Attrition Rate at Cognizant
Several factors have contributed to Cognizant’s high attrition rate. One of the primary reasons is the company’s policy of addressing redundancies.
Under the leadership of CEO Ravi Kumar S, Cognizant announced the layoff of 3,500 employees and the closure of 45% of its Indian office spaces in 2023, just four months after he took office.
This move aimed to streamline operations and reduce costs but also led to increased employee turnover.
Additionally, the company has faced challenges in retaining talent due to delayed salary hikes and bonuses.
Cognizant has postponed salary hikes twice in the past five months, with the latest increase now scheduled for August 2025.
Bonuses for eligible employees, initially slated for distribution in March, will be communicated by managers to their respective teams by March 11.
These delays have contributed to employee dissatisfaction and increased attrition.
Impact on Cognizant
The high attrition rate has had a significant impact on Cognizant’s operations and financial performance.
The company has had to invest time and resources in recruiting and training new talent to fill the gaps left by departing employees.
This has strained the company’s resources and affected its ability to deliver projects on time and maintain high-quality service levels.
Moreover, the high attrition rate has led to a loss of experienced and skilled employees, which has further impacted the company’s ability to innovate and stay competitive in the rapidly evolving IT services market.
The departure of key personnel has also raised concerns about the stability and continuity of ongoing projects.
Future Outlook
Looking ahead, Cognizant and other IT services companies will need to address the root causes of high attrition rates. This is essential to ensure their long-term success.
This includes creating a positive work environment, offering timely and competitive compensation, and providing opportunities for career advancement.
By addressing these issues, companies can improve employee satisfaction and retention, which will ultimately contribute to their growth and success.
Cognizant’s leadership has acknowledged the challenges and is taking steps to address them.
CEO Ravi Kumar S has emphasized the importance of efficient operations.
He also highlighted the need for strategic investments in areas such as artificial intelligence and digital transformation to drive future success.
By focusing on innovation and employee satisfaction, Cognizant aims to overcome the challenges posed by high attrition rates.
The company also seeks to maintain its position as a leading player in the IT services industry.
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