Cognizant Reports Over 30% Attrition For 5th Straight Quarter, Set For Complete Overhaul: Report

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High attrition rate comes at a time when Cognizant has been struggling

IT giant Cognizant has witnessed a quarterly annualised attrition rate of over 30 per cent for five straight quarters, reported LiveMint

The high attrition rate comes at a time when Cognizant has been struggling to keep up with the competition in the IT sector and reported yet another disappointing performance in its second-quarter earnings. 

While Cognizant reported a 6.5 per cent jump in revenue in the second quarter of FY 2022, it was well below the projected expected rate. 

The report added that the situation of high attrition had only worsened in the last three years since the new CEO, Brian Humphries, took over the operations. 

An average of about 77 per cent of the employees had stayed with the IT company for less than three years. 

When Humphries took over as the CEO, Cognizant had 2,88,200 employees, but 2,62,749 had left the company in the last 13 quarters. With another quarter of over 30 per cent attrition, close to 2,90,000 employees would have moved out of the company since Humphries became the CEO.

It takes close to six years for a company with an attrition rate in the mid-teens to refresh employees completely. However, in the case of Cognizant, the complete refresh is likely to happen in just four years.

The company’s high attrition rate is at least seven percentage points more than the average attrition rate of the five biggest IT services firms in the last year.

According to a survey by consultancy firm McKinsey & Co, 41 per cent of the employees who quit their job do it because of a lack of career growth opportunities. In comparison, 36 per cent pointed to low compensation as their reason. The remaining blamed uncaring leaders for their quitting. 

For Cognizant, the challenges are many. While the company has struggled to keep up with the competition in the market, it has also failed to keep its top leadership flock together. 

Of the 18 senior executives listed in the 2019 annual report, 17 have already moved out of Cognizant since Humphries took over.

Cognizant revenue growth has been less than half of its competitors like TCS and Infosys since 2019, and the growth rate could even widen this year. 

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