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Cognizant Laying Off 6,000 As It Exits Content Moderation Business Linked With Facebook

The move, which will result in layoffs of 6,000 employees, comes after complaints by minimum wage employees in Arizona and Florida about difficult working conditions and mind-numbing work watching objectionable material all day.

Cognizant Technology Solutions Wednesday said that it’s laying off 6,000 employees as it exits the controversial content moderation business, where the work it did for its most high-profile client, Facebook, landed it in the spotlight.

The plan to exit the business was unveiled by Brian Humphries, CEO of the Teaneck, N.J.-based global solution provider, during the company's third fiscal 2019 financial analyst call.

Along with a plan to exit the content monitoring business and layoffs, the company will attempt to sell the business, and set aside $5 million to invest in technologies to automate the monitoring of web content for clients.

[Related: Cognizant Doubles Down On Customer Digital Transformation Focus]

Cognizant is ranked No. 6 on the CRN 2019 Solution Provider 500 list.

Cognizant had reportedly signed a contract with Facebook worth $100 million per year to scrub violent, obscene, and hateful content from the social media platform.

However, published reports from The Verge said that minimum wage employees at Cognizant facilities in Arizona and Florida who suffered from stress and long-term mental harm from watching obscene or otherwise sickening images and videos for hours at a time.

Humphries used the quarterly analyst call to unveil plans to close its content operations business, which he said offers a wide range of business process services to clients across all industries. Projects including involve ensuring proper brand and business experiences such as integrating our health care patients or determining whether online maps are accurate.

"But within one subset of the content operations business, our work is largely focused on determining whether certain content violates client's standards and can involve objectionable materials," he said. "We've determined that this subset of work is not in-line with our strategic vision for the company."

Humphries did not mention specific client names during the call.

While Cognizant is planning to exit that business, Humphries said, the company does recognize the importance of cleansing the web of objectionable content and that businesses have a role to play in it.

"For this reason, we have decided to allocate $5 million to fund research aimed at increasing the level of sophistication of algorithms and automation, thereby reducing users exposure to objectionable content," he said.

Exiting this content moderation business will result in the laying off of about 6,000 employees, Humphries said. However, he said, it will not impact other Cognizant digital operations content work.

When asked by an analyst about how Cognizant will exit the content moderation business, Humphries replied that the company is working with partners to determine the best way to transition the business.

"For now, we've taken a restructuring charge against it, but our intention is to work very aggressively with partners to make sure that we can transition our employees with minimal disruption," he said. "And of course, financial consequence of that is of course minimal charges as well."

Facebook declined to discuss the Cognizant move.

However, a Cognizant spokesperson told CRN via email that the company, as part of an ongoing business transformation and growth strategy, is focusing on four key digital areas including cloud, digital engineering, IoT, and data to help develop modern, future-ready digital operations for clients while optimizing and protecting its traditional offerings.

"We have determined that certain content work in our Digital Operations practice is not in line with our strategic vision for the company and we intend to exit this work over time. This work is largely focused on determining whether certain content violates client standards--and can involve objectionable materials. Our other content-related work will continue. In the meantime, we will honor our existing obligations to the small number of clients affected and will transition, over time, as those commitments begin to wind down. In some cases that may happen over 2020, but some contracts may take longer," Cognizant said.

Cognizant stock rose 1.56 percent to $61.23 from the content moderation business disclosure this week until Friday.

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