Cognizant, a software company might rise the variable pay component for its employees. The report shows that this move is being introduced, as the IT services companies’ moves to cut the costs and possibly shore up the profits.
Brian Humphries, CEO said that the company is itself restructuring itself and also including the reducing management layers and rethinking its business and sales strategy. The report further states that the structure of reworking compensation is another measure in the roadmap, which aimed at making the company fit for growth. The report also added that earlier, Humphries said that the compensation changes are being considered.
A source with the considerations told financial daily that the flexible pay was a smaller compensation during the present. Though, the idea is to raise the variable pay to growth and contribution. The variable compensation might increase by 35% or more in middle levels employees, but it will be significantly more or fresher’s who are on a low base salary.
The cognizant spokesperson said that making compensation to major strategic areas such as digital is a critical enabler for the company and this is the process, the company is more deliberate about and spending significant effort and time in working on.
On August 2, the company has posted in-line second-quarter numbers, the IT services further revised its revenue and growth opportunities for the full year, as the company continues to pursue its cost optimization measures.
Earlier, Cognizant reported a revenue growth in the range between 3.9% and 4.9% in terms of the constant currency that was less than its prior year, which was in the range between 3.6% and 5.1% in May.
As per the report, the second-quarter was ended in June, the company posted its net profit of U$509 mn as compared to the period in the last year. The revenue stood at US$4.14 bn, which increase by 3.4% based on year-on-year growth. While, in terms of constant currency, the growth rate of the company was 4.7%.
The report also shows that the company is planning to add more than 500 employees that face sales department.