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Cognizant's Future-Focused Cost Strategy: Reinvesting for Growth, Margin Optimization

1/ Cognizant's CEO Ravi Kumar S implements a $400-million cost-saving plan, aka NextGen - cutting 3,500 non-billable roles, ~1% of the workforce. 💰🔧

2/ Real estate costs will rationalise, with 80,000 seats (~8 Mn. Sq Ft. Area) being given up as part of office space consolidation. 🏢📐

Estimated Cost Savings per annum: $ 400 million in two years. ~50% from office space consolidation 💰💰

Cost Optimisation Impact:

1/ Cognizant anticipates 20-40 basis points margin expansion in 2024 due to the NextGen plan. 📈💼

2/ Cognizant's share price on Nasdaq surged by 7% following NextGen’s cost-cutting plan announcement. 💹📈

3/ Revenue saved from Cost-saving measures will be reinvested to boost the company’s lagging growth. 📊📈💪

4/ Layoffs can lead to a loss of skilled and experienced employees, a decline in productivity, and a negative impact on team spirit. It can weaken the company's reputation and employees’ loyalty. Attracting and retaining top talent in the future may also become a formidable challenge. ⛔🔧👥

Country: United States of America 🇺🇸

Company: Cognizant Technology Solutions Corporation 💼🏢

Industry: Information technology 💻🌐

Cost Element: Employee Benefit Expenses and Lease Rent 💸🔧

Nature: Opex + Capex 💼💰

Cost Classification: Variable Cost / Semi-Variable Cost + Direct Employees Cost / Operations Overheads / Administrative Overheads / Marketing Overheads🔄💼📈📊📣



Reach us if you have any concerns regarding cost management accounting issues in your organization.


Partner, Chandra Wadhwa & Co. (Cost Accountants) | B.Com, FCMA, ACA, DISA | Certified SAP-CO Consultant | Executive Program on Management and Finance (IIM, Ahmedabad)

Address: 1305 & 1306, Vijaya Building, 17, Barakhamba Road, New Delhi - 110001, India Mail:

Tel: +91-8800018190, +91-7503703599.



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