US-based Cognizant sees headcount decline by 10,700 to 336,800 in Q4

Cognizant results: The US IT giant, that follows a Jan-Dec financial year, reported $19.7 billion in revenue at the end of 2024

Cognizant Technology Solutions reported a decline in its workforce during the December quarter, though the US-based IT giant anticipates a return to hiring in every quarter of 2025, signalling an optimistic outlook amid improving demand. The company, which operates on a January-to-December fiscal calendar, released its fourth-quarter earnings on Thursday, followed by a press conference to address its performance.

 

In Q4 2024, Cognizant’s workforce shrank by 10,700 employees year-over-year and 3,300 sequentially, bringing its total headcount to 336,800 as of December 31, 2024. “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. And that's what is at play and nothing beyond that,” said CFO Jatin Dalal at the press conference.

   

Rising attrition

Attrition at Cognizant rose by 2.1 percentage points to 15.9 per cent on a trailing twelve-month basis, continuing an upward trend seen across Indian IT firms in recent quarters. Dalal attributed this to a slightly better demand environment, which has enabled the company to hire for its growing needs.

 

The utilisation rate declined by 2 percentage points to 82 per cent in the quarter, though Cognizant’s management said it has seen robust improvements in utilisation throughout 2024.

 

Despite these challenges, Dalal asserted that Cognizant remains a ‘magnet for employees’. CEO Ravi Kumar S echoed this sentiment, highlighting the return of 13,000 former employees to the company, with 10,000 more expressing interest in rejoining.

 

Cognizant revenue reaches $19.7 bn in 2024

Cognizant reported Q4 revenue of $5.1 billion, marking a 6.8 per cent year-over-year growth (6.7 per cent in constant currency), at the higher end of its guidance range. For full-year 2024, revenue stood at $19.7 billion, reflecting a 2 per cent increase year-over-year (1.9 per cent in constant currency).

 

The company’s full-year operating margin improved to 14.7 per cent, up 80 basis points year-over-year, while its adjusted operating margin rose 20 basis points to 15.3 per cent.

 

Cognizant is investing heavily in AI, accelerating the development of AI-led platforms and expanding capabilities through the acquisitions of Thirdera and Belcan, Kumar S said.

 

Kumar S further emphasised that the company’s focus on client-centricity, agility, and innovation is driving the adoption of enterprise-grade generative AI.

 

Hiring trends across the IT sector

Cognizant’s headcount decline contrasts with competitor Accenture, which added 24,697 employees in its December quarter, marking its third straight quarter of net hiring. The world’s largest IT services firm, Accenture follows a September-August financial year. 

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), reflecting seasonal weakness due to furloughs and tapered hiring, according to a report by Moneycontrol. This followed a strong September quarter, where these firms together added 15,033 employees.