Cognizant's headcount increases by 3,800 in Q3

Cognizant

Information technology company Cognizant Technology Solutions has raised the headcount by 3,800 sequentially in the July-September quarter, following in the footsteps of its Indian peers.

However, when factoring in employees from the Belcan acquisition, the company’s net headcount saw an organic reduction.

Cognizant ended Q3 with approximately 3,40,100 employees. Attrition increased by 1 percentage point to 14.6 percent on a trailing twelve-month basis.

The company posted a decent show in Q3, with the management saying it saw an uptick in discretionary demand, alongside improved execution and the continuation of last quarter's momentum.

The Teaneck-based company follows the calendar year.

The company’s utilisation rate, too, increased by a percentage point to 84 percent in the quarter. The management believes that the company still has some headspace to improve the metric for the rest of the year.

Chief Executive Officer Ravi Kumar believes utilisation can go up a few notches up but not a “lot more”. In August, he said the company was seeing a historic “return of returnees”, which meant former Cognizant employees were making a comeback.

In India, the top five Indian IT services giants - Tata Consultancy Services, Infosys, HCL Technologies, Wipro, and Tech Mahindra – together added over 15,000 employees in the second quarter of 2024-25.

Also read: Mixed bag for TCS, Infosys, HCLTech, Wipro in Q2: BFSI sees uptick, large deals contract

Cognizant's bigger rival Accenture reported adding over 24,000  employees in its latest quarterly earnings, reflecting better demand compared to previous quarters.

A substantial portion of the workforce of Nasdaq-listed information technology companies operates out of India and their results serve as an indicator of the broader trends within the over 5 million-strong Indian IT sector.

The IT major generated over 150,000 lines of accepted code per month—approximately 2 million lines annually— by incorporating AI tools into projects for client delivery.

Kumar highlighted that many clients aim to reduce their backlog due to decreased deployment costs resulting from the application of AI. He added that clients do not wish to cut their budgets because of productivity benefits; instead, they want to achieve more with less. “So that is a very positive indicator, it also gives us an opportunity to consolidate in places where our productivity is higher than our peers."

Kumar, while speaking to the press after the results, highlighted that over 13,000 associates globally have returned to Cognizant after experiencing an opportunity elsewhere. In August, he said the company is witnessing a historic “return of returnees” in the company.

Nonetheless, the headcount decreased by 6,500 a year-on-year basis in Q3.

In Q3, the company’s net profit came in at the higher end of its guidance range, increasing by 2 percent year-on-year (YoY) to $5 billion, beating Street estimates of $4.98 billion.