One of the 100 largest digital companies in 2019, Cognizant, has announced that it will be downsizing its content moderation business and layoff 7000 IT workers. People familiar with this industry believe that very soon, there will be another round of layoff in which a similar number will be retrenched. Content moderation refers to the process of detecting objectionable content in social media sites like Facebook.
The gross income of Cognizant in 2017-18 was US $ 16 billion and its net profit was US $ 2.8 billion (US $ 1 billion approximately equals 7,000 crore rupees). This ranks Cognizant 193rd rank among the Fortune 500 companies. In 2017, there were world-wide 2,60,200 workers in Cognizant, of which 72 per cent (i.e., 1,88,000) were Indians. In 2017, the company had laid off 10,000 workers in India.
The layoffs are not because the company is not making profit. In the quarter ending in September, the total revenue of Cognizant grew by 4.2 per cent to US $ 4.25 billion compared to one year ago. The net profit in this quarter was US $ 497 million (approximately, 3,500 crore rupees). The net profit in the previous quarter was US $ 477 million.
Now Cognizant has an employee strength of 2,90,000, of which more than 2,15,000 are Indians. This means that the total numbers of workers employed by Cognizant has increased. Similarly, in Tata Consultancy Services, Infosys and Wipro has hired 59 per cent new workers compared to the previous quarter. These three companies have added a total of 28,157 workers in this quarter, while it had added 16,687 workers in the previous quarter. On the one hand, new recruitment is going on; on the older hand, employees are being laid off. Just like Cognizant, various prominent IT companies like Infosys, Deutsch Bank, Cap Gemini and UI Path are laying off workers. For example, Infosys has laidoff more than 10,000 workers this year. Companies are retrenching middle and higher level managers, who are earning higher wages, and hiring junior level workers so that profits can be maximised.
UNITE, a union of workers of IT and IT enabled services based in Chennai has pointed out that workers are being laid off only to maximize profits. It has called on the workers of IT and ITES to get unionised to defend their interests, so that they can fight against such unjust layoffs.