Cognizant to cut over 4,000 jobs as Project Leap shifts focus to AI

Cognizant Technology Solutions is set to lay off about 4,000 employees, accounting for roughly 1% of its total workforce. This decision comes as the company grapples with declining demand and a strategic pivot toward automation, prompting a revision of its growth forecasts. On Wednesday, the firm unveiled Project Leap, an initiative aimed at enhancing investments in artificial intelligence, developing integrated digital services, and focusing on workforce skill enhancement. The anticipated cost of this transformation is estimated to range from $230 million to $320 million, which includes $200 million to $270 million allocated for employee severance and related expenses. However, Cognizant expects to achieve savings of up to $300 million this fiscal year. While the company has not detailed the specific roles affected by the layoffs, it has indicated during its post-earnings analyst call that it plans to onboard over 20,000 new employees this year, suggesting that the layoffs may primarily impact mid-level positions. Notably, despite the impending job cuts, Cognizant's overall headcount saw an increase of 6,000, reaching 357,600 by the end of March 2026. This marks the second wave of job cuts under the leadership of CEO S. Ravi Kumar, who stepped into the role in January 2023. Earlier this year, in May, Cognizant let go of around 3,500 employees from non-billable positions. The current restructuring effort through Project Leap highlights the company's intention to adapt its workforce in light of rising investments in AI and digital transformation. April proved to be a challenging month for the tech sector, with over 40,000 job losses attributed to shifts driven by AI. Major companies such as Oracle, Snap, and Meta have also undertaken significant workforce restructuring as they increase their focus on AI solutions and automation.