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Cognizant Cutting Jobs In India: Reports

The reported cuts will likely most impact mid-level employees in India, where about 70 percent of the company's workforce is located, and come shortly after Cognizant reported less-than-expected revenue and earnings for its first fiscal quarter of 2019.

Global solution provider and IT services company Cognizant is cutting an unknown number of jobs in India, where about 70 percent of its total workforce is located, according to media reports.

The layoffs come in the wake of the company's Thursday publishing of falling margins and revenue that did not meet expectations during its first fiscal quarter 2019.

India-based Business Standard reported Monday that Cognizant looks to be cutting primarily mid-level staff in its India operations.

[Related: Cognizant Fined $25M In Bribery Case As Two Former Execs Indicted]  

The last Cognizant layoff, which happened in 2017, was focused on about 400 senior-level executives, Business Standard reported.

The pending layoffs were also reported by India-based Business Today, which said the job cuts are being done to slash costs and restore growth.

Cognizant, which ranked No. 6 in the CRN 2018 Solution Provider 500, said it could not make executives available to CRN to directly address the reports. However, a Cognizant spokesperson emailed a statement to CRN that read: “As part of our realignment program, management is currently evaluating various strategies, including additional employee separation programs. The timing, nature and magnitude of these initiatives are not finalized at this time."

Teaneck, N.J.-based Cognizant reported it has about 285,000 employees worldwide in the first fiscal quarter, up 9.3 percent over the 261,400 employees it had during the first fiscal quarter of 2018.

However, the company on Thursday reported year-over-year revenue growth of 5.1 percent. That growth missed analyst expectations according to Seeking Alpha.

The first fiscal quarter was a tough one for Cognizant.

In addition to the slow revenue growth, Cognizant also reported net income of $441 million, down over 15 percent from the prior year period. Earnings per share on a GAAP basis was 77 cents, down from last year's 88 cents. on a non-GAAP basis, the company reported earnings per share of 91 cents compared to last year's 94 cents. GAAP operating margin for the quarter was 13.1 percent, down from last year's 17.7 percent.

The company missed earnings per share expectations by 13 cents per share, according to Seeking Alpha, and lowered its forward-looking estimates.

Cognizant CEO Brian Humphries, who started his role just this past February, acknowledged the company's disappointing first-quarter performance, and that the company has a lot of work to do.

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