‘We are on the journey to get to the operating model,’ says Cognizant CEO Ravi Kumar S.
Cognizant plans to spend upward of $270 million on employee severance and other personnel-related costs as part of layoffs under its “Project Leap” initiative to become more agile and enable an artificial intelligence-enabled operating model.
The Teaneck, N.J.-based company–No. 7 on CRN’s 2025 Solution Provider 500–detailed the plan during its latest quarterly earnings call. Cognizant could cut as many as 15,000 jobs globally, with most of those in India, according to India-based business news provider Moneycontrol. Cognizant has more than 357,000 employees.
“We are on the journey to get to the operating model,” Cognizant CEO Ravi Kumar S said on the call, according to a transcript. “Leap is to make sure that we get there fast. It’s our opportunity to resize our (talent) pyramid with a broader parameter. That’s why we’re hiring more school graduates, more early careers. And (go shorter) on the height of the pyramid so that you get to expertise much faster. That’s our model.”
[RELATED: Atlassian Plans 1,600 Layoffs With Savings Shift To AI, Enterprise Sales]
Cognizant Layoffs 2026
CRN has reached out to Cognizant for comment.
Project Leap should deliver savings in 2026 of about $200 million to $300 million, Cognizant Chief Financial Officer Jatin Dalal said on the earnings call, held Wednesday and covering the three months ended March 31. Cognizant will see a full year of savings in 2027 and plans to reinvest a third of the savings into upscaling its workforce while exploring mergers and acquisitions.
Indeed, Cognizant revealed on the same day as its latest quarterly earnings report that it plans to buy AI-first IT managed services provider Astreya Partners for about $600 million. The acquisition should close in Cognizant’s second quarter and add capabilities around data center buildouts with an outcome-based model.
What Is Cognizant’s ‘Project Leap’?
Two-thirds of Project Leap’s savings will support future growth across integrated offerings, AI capabilities and partnerships, the executives said on the earnings call. Cognizant raised its 2026 adjusted operating margin guidance range to between 16 percent and 16.2 percent thanks to the expected savings. Dalal said that Project Leap should cost Cognizant a total of $230 million to $320 million.
Cognizant should need a “couple of months” for completing Project Leap, with effects felt for another three to four months, Kumar said on the call. Cognizant sees an opportunity in the AI era helping large enterprises transform processes even in highly regulated industries to increase value.
The AI era doesn’t mean a pause on headcount, with Kumar pointing to around 20,000 new hires in 2025 and a higher number expected in 2026. Cognizant is rethinking its traditional “pyramid” approach to talent to develop more interdisciplinary AI-augmented teams, Kumar said. Cognizant has an “AI builder” career program mapping every role in the solution provider to a future-ready AI job family with defined pathways and targeted learning plans.
“The Leap program reinforces our commitment to be in the winner circle of revenue growth and supports our journey of expanding margins,” the CEO said. “To win, we must move fast and stay agile, which is exactly why Project Leap is so critical.”
As a trend, AI is pushing toward a repricing of labor-intensive IT services, Bernstein said in a report in April. Firms are moving from labor-based delivery models to agent-driven, platform-led, outcome-based services–a services-as-software model.
They are compressing the delivery pyramid and moving more into a diamond structure, with AI and automation taking over coding, testing documentation and level one and level two support, according to the investment firm. Instead, humans are handling oversight, quality control, product and service design and other high-value work.
Firms that keep productivity gains through intellectual property platforms and managed operations are the ones getting rewarded, according to Bernstein.
Cognizant is among the small number of solution providers partnered with not only Claude maker Anthropic, but its rivalChatGPT maker OpenAI as the two AI upstarts build out their channel partner programs and go deeper into enterprise sales.
Kumar said on the earnings call that token metering is now a reality for projects, both for fixed-price programs and for time and material billing. Cognizant can leverage AI for reducing its own costs for completing a project, increasing the margin. Kumar said that at this point, nearly 40 percent of its code is AI assisted.
For time-and-material, Cognizant is using tokenized rate cards, with clients responsible for digital effort and Cognizant responsible for human effort. But the solution provider sees customers coming back to ask Cognizant to handle both for better optimization and cost management.
“We are ahead on the curve, both to take the accountability of digital and human labor for ourselves or if clients want to take the accountability for themselves,” he said.
Cognizant Q1 Saw AI Growth
Cognizant met expectations on revenue reported on its latest quarterly earnings call in April, according to a William Blair report. The investment firm said that the solution provider did underperform in gross margin and in forecasted second-quarter revenue.
The company’s executives said to expect between 3.2 percent and 4.7 percent growth in the second fiscal quarter ignoring foreign exchange, taking “a more cautious near-term view of discretionary spending based on recent global events and trends,” the CFO said. It still expects full year revenue growth of 4 percent to 6.5 percent ignoring foreign exchange.
Cognizant reported $5.4 billion in revenue for its first fiscal quarter, up 3.9 percent year on year ignoring foreign exchange. About 90 basis points from recent acquisition 3Cloud and large deal ramp-ups in North America and financial services helped with growth. The financial services business grew 10 percent year on year ignoring foreign exchange. Health sciences was weaker than expected, however, falling about 1 percent year on year.
Bookings grew 21 percent year on year for the quarter and 11 percent for the trailing 12 months. Softer small discretionary projects led to flat annual contract value (ACV) year on year, but Cognizant did land seven large deals of more than $100 million in total contract value (TCV).
Cognizant had 5,000-plus AI engagements exiting the quarter, up from 4,000 in December, showing accelerating AI demand.
Since the earnings call, Cognizant’s stock has fallen about 5 percent, trading at about $52 a share.
William Blair was still bullish on Cognizant, saying in its report that the company shows consistent growth and profitability driven by an AI-focused strategy, improved operational execution and growing demand in key verticals.
Cognizant–alongside Accenture, Deloitte and Infosys–was singled out as a system integrator with a deep Anthropic investment and strong platform-ization that could monetize agentic AI in regulated and complex workflows in an April report by Bernstein.
Cognizant isn’t alone in pursuing layoffs in 2026 as the battle for AI dominance heats up. Other vendors that have announced or conducted layoffs so far this year include Atlassian, Amazon Web Services, Autodesk and Kaseya.
