Cognizant has announced a restructuring plan worth between $230 million and $320 million as it adjusts to the rising use of artificial intelligence and automation in the IT services sector.
The initiative, called Project Leap, will run through 2026 and is aimed at improving efficiency, cutting costs, and aligning the company with changing client needs.
The move reflects a wider shift across the industry, where companies are reworking operations to stay competitive in a market shaped by AI-driven tools.
Workforce Changes and Cost Allocation
A large share of the total budget is set aside for employee-related costs, showing that workforce changes will be a key part of the plan.
Cognizant has allocated $200 million to $270 million for severance and similar expenses, along with another $30 million to $50 million for additional personnel costs.
Chief Financial Officer Jatin Dalal said the program will span multiple regions and business units. While the company has not disclosed how many roles may be affected, the level of spending indicates that job cuts and role shifts are likely.
These steps are expected to help the company simplify its structure and improve how work is delivered.
Focus on AI and Talent Strategy
The restructuring is part of Cognizant’s broader plan to strengthen its position in an AI-focused market. As clients increase the use of automation and AI tools, they are asking for better results at lower costs.
To meet these demands, Cognizant is updating its workforce strategy. The company plans to hire more than 20,000 fresh graduates in 2026, focusing on skills linked to new technologies such as AI, data, and digital services.
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This shift shows a clear move toward early-career hiring, while some mid-level and routine roles may face pressure due to automation.
Financial Outlook and Business Performance
Cognizant expects Project Leap to deliver savings of $200 million to $300 million in 2026, with further gains likely in 2027.
A portion of these savings will be used to support AI and digital initiatives, while the rest will help improve operating margins, now expected to be between 16.0% and 16.2%. Despite the restructuring, the company continues to report steady growth.
It posted first-quarter revenue of $5.4 billion, marking a 5.8% increase compared to the same period last year.
Headcount also rose to 357,600 employees by March 2026, showing that the company is still expanding in selected areas even as it makes structural changes.
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