3 min read.Updated: 27 Sep 2021, 09:00 PM ISTVarun Sood
Mid and lower level employees, too, have left the company in a huff, with Cognizant reporting a 31% jump in its attrition rate at the end of June quarter
After the exodus of the entire senior leadership team in the past 30 months, Cognizant Technology Solutions Corp. chief executive Brian Humphries finds himself in a quandary: how to retain senior leaders he had himself hired or promoted?
Last week, Cognizant faced yet another jolt when the US head of its banking and financial services division, Daniel Cohen, quit. Cohen was among seven senior executives to have moved out in the last two years.
Cohen, who was hired by Humphries in October 2019, stepped down on 23 September, according to two executives familiar with the development, seeking anonymity.
Cohen was sacked, said one of the executives mentioned above. However, Mint could not independently ascertain the reason behind his departure.
When contacted over email, Cohen declined to comment.
“Craig Stanley has been appointed business unit leader for BFS North America, effective immediately," said Greg Hyttenrauch, president, North America, Cognizant. “I am especially pleased to be able to promote an existing member of the BFS team, and am confident that with Craig’s knowledge of our business—combined with his 35 years of experience across all sectors of the financial services industry—we will be well-positioned to commence the next chapter of our BFS journey."
Cognizant’s banking and finance business accounted for $3.3 billion, or one-fifth of its $16.65 billion revenues in 2020. The tech major follows January-December fiscal year.
When Humphries took over as the chief executive in February 2019, Cognizant listed 18 executive officers in its annual report. Today, barring Robert Telesmanic, the controller and chief accounting officer, all executives have quit. Eight of Cognizant’s nine executive officers named in the latest annual report have been with the company for less than two years.
Cohen was the third external hire to have quit. Humphries first hired Jeff Heenan-Jalil to steer the Cognizant’s healthcare vertical in August 2019, only to sack him three months later. Bret Greenstein, who joined the company in August 2018 and was promoted to head the artificial intelligence and analytics practice in October 2019, decided to leave Cognizant in August.
During the period under consideration, four senior executives who were elevated by Humphries also moved out in quick succession.
Ramkumar Ramamoorthy, who was appointed as India chairman in September 2019, quit in July 2020. DK Sinha, who was elevated to head the US business in December 2019, resigned in July. Pradeep Shilige was appointed as the head of delivery operations in August 2019, but stepped down in July 2020. Finally, Malcolm Frank, who was asked to steer the digital business this January, quit six months later.
“Sinha was overseeing 75% of geography revenue. Malcolm was the head for 80% of services revenue. Pradeep was in charge of 100% of delivery. Ramkumar was overseeing the company’s 80% workforce," said the second person, a former employee. “At the heart of all these departures is the lack of strategic direction and constant volte-face with strategy."
Mid and lower level employees, too, have left the company in a huff, with Cognizant reporting a 31% jump in its attrition rate at the end of June quarter.
The high levels of attrition across the organization is hurting growth: Cognizant’s full-year revenue declined 0.76% in 2020, following 4% growth in 2019. In contrast, Infosys Ltd, under Salil Parekh, reported revenue growth of 7.9%, 8.31% and 6.1% in FY19, FY20 and FY21. Infosys follows the April-March financial year.
Cognizant’s poor performance is reflected in its stock price movement, delivering just 6% returns between 6 February 2019 and 26 September 2021, despite having spent $2.1 billion and $2.7 billion in 2020 and 2019, respectively, on share repurchase and dividends. In comparison, shares of Accenture Plc, Tata Consultancy Services Ltd, Infosys and Wipro Ltd were up 118.1%, 85%, 118% and 126%, respectively.
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