The New Jersey-headquartered firm will be more employee centric, strengthen on winning larger deals and better operational metrics in order to “accelerate growth”, according to Rajesh Nambiar, MD and CEO of Cognizant India.
“The team, including the CEO, will meet 100 clients in 100 days. He (Ravi Kumar) will also be in India later this month to visit delivery centres and do employee-engagement (programmes),” Nambiar told ET.
This is the first quarterly results announcement for the NASDAQ-listed firm since the Infosys veteran replaced Brian Humphries at the helm in January.
The US-based software exporter’s net profit decreased 9.6% in the fourth quarter to $521 million on account of impairment expenses and higher operating costs. The company’s revenue, however, saw an uptick, rising 1.3% on year to $4.84 billion for the three-month period. Revenue was flat while the profit declined 20.7% on a sequential basis. Cognizant said the first quarter revenue is expected to be $4.71-$4.76 billion– a decline of 1% to flat number in constant currency.
When asked about the Q1 guidance, Nambiar said even in the current quarter, the numbers were a “bit muted” due to the organizational changes the company is undergoing. “Our booking numbers are good as it grew 12% on year. In some of the large deals, the nature of the best is that it will take a little more time before it yields to revenue..it will take 1-2 quarters to reap the benefits,” he added.
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‘Demand not a challenge’On demand, Cognizant is still not seen as a challenge as the impact of impending recession has not visible on clients ”significantly” yet.
“We are beginning to see minor impact..including in banking, health sciences, manufacturing, retail and even the tech industry (impacted by layoffs) is under close monitoring. But cost-takeout and vendor consolidation opportunities will make up for any slowdown,” Nambiar added.
Cognizant’s attrition on a last 12 month basis (LTM) was down 26% from 28% on year. On a quarterly basis, it said attrition was taming at 19%, down sequentially from 29%. This compares with top four Indian IT firms whose LTM attrition has tapered from peak levels of 25-30% last year to about 20-21% in the December quarter for each of the top four Indian IT companies.
The total headcount at the end of the fourth quarter stood at 355,300, an increase of 5,900 from the previous quarter. The company said it hired 10,000 freshers for the December-ended quarter and 50,000 campus hires for the full year. While it was evaluating a full-year hiring number for FY23, Nambiar said a “similar” fresher intake can be expected for the first quarter.
Nambiar also said attrition will climb down further in the coming quarters aided by its inhouse initiatives such as “internal Job Moves” to fill up vacancies internally without waiting for the promotion cycles.
