US IT company Cognizant is set to lay off 3,500 staff and reduce its office space in a bid to save costs.
The job cuts will impact employees primarily across non-billable and corporate functions.
The move is part of Cognizant’s NextGen programme aimed at simplifying the firm’s operating model, optimising corporate functions and realigning office space.
As part of the programme, the company is scaling back its office real estate by 11 millionft², equivalent to 80,000 seats.
“We expect the personnel-related actions of this programme to impact approximately 3,500 employees or approximately 1% of our workforce,” the company said announcing its first-quarter results.
Revenue during the first quarter was reported to be $4.8bn, a 0.3% decline in comparison with the year-ago quarter.
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The layoff announcement comes Accenture said in March that it will reduce its headcount by 19,000 due to the grim macroeconomic environment.
Cognizant said its revenue will fall in 2023, highlighting the challenges faced by the IT services industry.
Revenue for the entire 2023 financial year is anticipated to fall between $19.2 and $19.6bn, representing a decline of 1.2% to a growth of 0.8% or a decline of 1.0% to a growth of 1.0% in constant currency.
In the second quarter, Cognizant anticipates that the revenue will total $4.83bn-$4.88bn, declining by 0.6% to 1.6%.
The NextGen programme is expected to cost the company up to $400m, which includes around $200m in employee severance packages and other costs related to layoffs.