BENGALURU: It Services major Cognizant has begun to take a hit with staff leaving the company. The US-based tech firm has revised its revenue outlook for the calendar year 2021 to 7-9 per cent growth in revenues (8-9 per cent in constant currency terms), which is still not at par with its peers like TCS, Wipro, Infosys, HCL Tech which have projected a double digit increase in revenues.
For Cognizant, voluntary attrition (read exit of employees) for the first quarter of 2021 increased to 18 per cent compared to 16 per cent a year ago. Total attrition stood at 21 per cent, which is much higher than most of the industry players.
Analysts expect the second quarter of this year to see simiar exodus of employees further hurting its business despite the company’s plans to step up hiring of freshers 28,000 planned for 2021. During an analysts call after the software major’s first-quarter earnings, CEO Brian Humphries said that in some cases, commercial opportunities were forgone due to an inability to source talent. Cognizant, which has a nearly 2.9 lakh employee base with 90 per cent staff in India, however, is riding high on its digital revenues, that increased by 15 per cent over the previous year.
It now constitutes 44 per cent of its overall revenues. The IT services sector has seen a huge demand for digital skills, a reason that has led to higher attrition during the last quarter as Covid-19 pushed businesses to enhance their digital capabilities.
For the first quarter ended March, Cognizant reported revenue of $4.4 Billion, a growth of 2.4 per cent year on year in constant currency terms. The company said its revenue growth could have been higher but lost out due to a shortage of talent. Revenue growth was primarily led by the healthcare segment which grew 7.9 per cent year-on-year.