Cognizant board to talk business realignment efforts on February 24

The board of directors at IT services major Cognizant is meeting in Chennai on Monday, the Nasdaq-listed company’s second such meet in India since Brian Humphries took over as the chief executive officer and managing director last year.

According to sources in the know, the board is likely to deliberate on a range of issues including the business realignment efforts taken up under the new CEO, and also issues pertaining to delivery capabilities in India.

“The board of Cognizant usually meets up once or twice in India every year as this is one of the important delivery bases for the company,” a person said. However, it was not clear whether cofounder Francisco D’Souza, who recently announced his decision to step down from the board from March 31, would attend the meet.

Cognizant, which has its roots in Chennai, currently employs around 290,000 people globally. Of this, around 200,000 are in India.

Sources said that the US-headquartered company, which has shown signs of a turnaround in its fourth quarter performance, is also making some changes in its delivery model to garner more digital revenues.

As part of its 'fit for growth' plan, Cognizant is currently pursuing various cost-optimisation measures through which it hopes to save around $150-$200 million by the end of 2020. The IT services firm is also rationalising its employee pyramid by hiring more fresh graduates. It had earlier said that the company would remove 10,000-12,000 mid- to senior-level staffers and redeploy about 5,000 of those impacted.

Sources also said that the board is likely to deliberate on the alternate revenue streams that can be explored to compensate for the loss of revenues arising from the exit of content moderation business.

The Teaneck, New Jersey, based IT firm last year decided to exit the content moderation business, which has an overall revenue impact of $240-270 million per annum.

Cognizant, which beat street estimates with its fourth quarter performance, has projected that its revenues will by 2-4 per cent in the current year. Though this is the lowest growth projection amongst its peers, investors believe that the company’s performance may improve in coming quarters.