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Cognizant Reports Workforce Decline but Plans to Resume Hiring in 2025
Workforce Trends
Cognizant Technology Solutions experienced a reduction in its workforce during the December 2024 quarter. The company’s total headcount decreased by 10,700 employees year-over-year and 3,300 sequentially, bringing the total workforce to 336,800 as of December 31, 2024.
Despite this decline, Cognizant anticipates resuming hiring in every quarter of 2025, reflecting optimism about improving demand. CFO Jatin Dalal stated, “As we look forward, we feel that we will add headcount as we need to grow and as we grow during the course of 2025.”
Rising Attrition and Utilization Rate
Attrition at Cognizant increased by 2.1 percentage points, reaching 15.9% on a trailing twelve-month basis, continuing a trend observed across Indian IT firms. According to Dalal, improved demand has enabled the company to increase hiring for its growing needs.
Meanwhile, the utilization rate dropped by 2 percentage points to 82%, though management noted that significant improvements were seen throughout 2024.
Employee Retention and Rehiring Efforts
Despite workforce challenges, CEO Ravi Kumar S emphasized that Cognizant remains an attractive employer. He highlighted the return of 13,000 former employees, with 10,000 more expressing interest in rejoining.
Financial Performance
Cognizant reported Q4 2024 revenue of $5.1 billion, marking a 6.8% year-over-year growth (6.7% in constant currency). For the full year 2024, revenue reached $19.7 billion, reflecting a 2% increase year-over-year (1.9% in constant currency).
Operating margins showed improvement, with:
- Full-year operating margin rising to 14.7% (up 80 basis points year-over-year).
- Adjusted operating margin increasing to 15.3% (up 20 basis points).
Investments in AI and Innovation
Cognizant is investing heavily in AI, accelerating the development of AI-driven platforms and expanding capabilities through acquisitions, including Thirdera and Belcan. Kumar S emphasized that client-centricity, agility, and innovation are driving the adoption of enterprise-grade generative AI.
Hiring Trends in the IT Sector
Cognizant’s workforce reduction contrasts with Accenture, which added 24,697 employees in the December quarter—its third consecutive quarter of net hiring.
Meanwhile, in India, the top five IT services firms (TCS, Infosys, HCLTech, Wipro, and Tech Mahindra) collectively saw a net decline of 2,587 employees in Q3 FY24 (October-December 2024). This was attributed to seasonal furloughs and tapered hiring, following a strong September quarter where 15,033 employees were added.
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