Hyderabad dislodges Chennai to become Cognizant’s largest centre globally

Cognizant has announced adding another 15,000 seats in Hyderabad, thus giving it a definitive edge and pipping Chennai.

Hyderabad has quietly overtaken Chennai to become Nasdaq-listed Cognizant’s largest global centre, signalling an important shift in the IT firm’s focus within India.

People familiar with the development told Moneycontrol that Cognizant’s Chennai headcount is currently in the 55,000-56,000 range. At the same time, Hyderabad has grown to over 57,000 employees and is growing faster, partly driven by a larger business process outsourcing (BPO) presence in the city.

While a thousand here and there could shift things by a quarter or two, the recent announcement by Telangana Chief Minister Revanth Reddy and Cognizant chief executive Ravi Kumar assumes significance.

Cognizant will lay the foundation stone for its new 10 lakh square feet campus on August 14. The company has announced adding another 15,000 seats in Hyderabad, thus giving it a definitive edge and pipping Chennai.

Moneycontrol has sent queries to Cognizant. This story will be updated when they respond.

Winds of change

Jayesh Ranjan, Telangana’s Special Chief Secretary for the Department of Information Technology, Electronics & Communications (ITE&C) and Department of Industries & Commerce told Moneycontrol that while Chennai was indeed an attractive destination for IT companies to set up their India centres a few decades ago, that aura has dimmed.

“Unfortunately, the agility that other cities have shown, particularly Hyderabad, in improving infrastructure, focussing on skill development, and being proactive in making the global MNCs feel welcome, hasn’t been displayed by Chennai. It comes as no surprise, then that Cognizant has now chosen to make Hyderabad their largest centre anywhere in India”, Ranjan said in a statement to Moneycontrol.

“It won’t surprise me at all if Hyderabad in days to come becomes Cognizant’s largest footprint in the world also. They have had a great experience in Hyderabad, and we the Government are committed to help them further thrive and flourish,” he added.

Kamal Karanth, the co-founder of staffing specialist firm Xpheno told Moneycontrol that a combination of sophisticated infrastructure, enterprise-friendly policies, incentives and interventions have set Hyderabad on the fast track to becoming one of the top choices for global enterprises.

"A strong talent pull is evident with over 1.8 million jobseekers from other states stating Hyderabad as a preference to move in.  The city is best poised for new expansion and capacity creation plans of large players in the IT sector," Karanth said.

 Shift in centre of gravity

In 1994, when market research firm Dun & Bradstreet chose Chennai over Bengaluru to establish its in-house technology centre, it underscored the city’s potential as a technology services hub.

The captive unit would go on to become Nasdaq-listed Cognizant, which today competes with Indian rivals such as Tata Consultancy Services (TCS), Infosys and Wipro.

For three decades, Chennai remained the centre of gravity for Cognizant, with its headcount going from zero in 1994 to more than 65,000 by mid-2022.

When the company expanded its office in Navalur in July 2022, it had over 81,000 in Tamil Nadu with over 16,000 in Coimbatore.

As a result, it became one of the largest employers in Tamil Nadu.

But, not anymore.

Things change

In the last two years, Cognizant’s global headcount has been coming down with every passing quarter. The company’s headcount was 355,300 globally and 258,400 in India at the end of December 2022.

By end of June 2024, the company’s global headcount was 336,300, a drop of 19,000 professionals. A good portion of this drop was in India. Chennai bore the biggest brunt as the company has been selling off many of its fully-owned campuses in the city.

From $2 million in revenues in 1994 to over $19 billion in 30 years, the company has been synonymous with Chennai all these years. To be sure, the only other Chennai based company that has reached a billion dollars in revenue in the IT services and SaaS space is Zoho, at a little over $1 billion last year.