Sequentially, revenue was up to $4.2 billion, from $4 billion. Compared to last year, the dip was just 0.7% in constant currency and near flat on a reported basis. Only Infosys reported better numbers than this in the quarter. “We are creating 2020 bonuses at higher levels than 2019. We’re also implementing targeted salary increases and promotions in the fourth quarter. Both will hurt our cost structure in 2020 versus the prior year, but are an essential and normalised part of the cost structure in a services business,” Humphries said in a post earnings conference call with analysts.
The move follows that of Infosys and Wipro which are also rolling out hikes and promotions across all employee levels from January. Large deal wins and better visibility of the order pipeline has raised optimism among companies.
Cognizant added 1,900 employees in the last quarter, taking the total headcount to 283,100. Annualised attrition, however, was one of the highest in the industry at about 17.9%. The company said a significant portion of this is related to involuntary exits and skewed towards more junior employees.
That was less than the 24% in the second quarter which had thousands of employees being made redundant as part of the company’s Fit for Growth plan. Voluntary attrition, Humphries said, declined for the fifth consecutive quarter. Margins however continued to remain under pressure, dropping 150 basis points to 14.2% at a time when rivals like Infosys and Wipro have seen a boost due to increased offshore activity and reduced travel. Net profit was down 30% to $348 million.