Cognizant has announced a restructuring plan called Project Leap, as the company plans to invest $230 million to $320 million in future growth. The announcement came alongside its first-quarter results on April 29. The company has not explicitly termed the move as layoffs. Financial allocation indicates the need to establish a new employee structure together with a new operational framework for the organization.
The plan aims to reposition Cognizant toward a more agile, efficient delivery system. The company plans to achieve its upcoming growth targets through rapid service delivery, better service integration, and improved compliance with customer service requirements.
A large portion of the restructuring budget is allocated to employees. Cognizant expects to spend $200 million to $270 million on severance between April and December, along with an additional $30 million to $50 million on other personnel-related costs.
CFO Jatin Dalal described Project Leap as a global program spanning multiple geographies and business units. The company has not disclosed the number of employees who may be affected. The expansion of this program shows that its impact won’t be limited to a single area or purpose.
As a region that Cognizant relies on for its largest labor force, India is expected to experience changes as the restructuring process unfolds. Investment in Artificial Intelligence, Employees Reskilling Program, and New Recruitment Strategy.
On the other hand, employees need further training on new technologies and service delivery methods. Moreover, the corporation is expected to employ more than 20,000 new freshers in 2026. Currently, Cognizant hires employees with AI skills.
Hiring new people is also expected to affect mid-level positions significantly.
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Cognizant expects Project Leap to begin delivering financial benefits from 2026. The company estimates savings between $200 million and $300 million next year, with further gains likely in 2027.
These expectations have already been reflected in its outlook. Cognizant has raised its adjusted operating margin guidance to 16.0%–16.2%. The organization will allocate part of its savings to investments in artificial intelligence and expansion projects. The budget’s remaining funds will be dedicated to activities that will enhance profit margins.
The company generated $5.4 billion in revenue during the first quarter, a 5.8% increase over the previous year. The growth rate was 3.9% on a constant-currency basis. Cognizant expects second-quarter revenue between $5.45 billion and $5.52 billion, indicating steady but moderate growth during its transitional period.