Cognizant, a US-based software exporter, has revealed that as part of its cost-cutting efforts, it would let go of 3,500 people and downsize its office space. The firm also predicted that since the bulk of its income comes from the US and the sector is now suffering due to the economic crisis, its sales are projected to fall in 2023.
Cognizant has issued a sales forecast of $19.2 to $19.6 billion for the whole year. A drop of -1.2 percent to 0.8 percent or an increase of -1 percent to 1 percent in constant currency is shown by the statistics given.
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The business anticipates revenues of $4.83 to $4.88 billion in the second quarter, down -1.6 percent to -0.6 percent in constant currency. Revenue for the three months that ended in March decreased by 0.3 percent from the prior year to $4.81 billion, exceeding $4.74 billion in forecasts on the stock market. Sequentially, sales decreased by 0.7 percent while profit increased by 11.3 percent.
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Cognizant’s margins, at 14.6 percent, are among the lowest in the IT sector. For the whole year, the business projects an adjusted operating margin of 14.2-14.7 percent. In the first quarter of FY23, which was the first quarter that new CEO Ravi Kumar S presided over for most of the period, it outperformed analyst estimates.
After previous CEO Brian Humphries’ “involuntary termination” on January 12, he took over as CEO. The change in the company’s leadership and chairman of the board comes with a challenging period for the sector, which is dealing with several challenges.