Rating: neutral; Can Cognizant’s new CEO work magic?

IT giant Cognizant has appointed Ravi Kumar S as its CEO. The company’s outgoing CEO, Brian Humphries, will continue as an adviser until March 15, 2023 to facilitate a smooth

transition. The company is facing two key challenges, and to some extent they are related to each other. First, weaker than-industry revenue growth due to market share loss and

supply side challenges, particularly at onsite locations, and two, entrenched attrition in the organisation leading to an overall attrition much higher than the industry average.

We have been noting that Cognizant needs to urgently address its attrition problem to avoid growth and margin slippages. Ravi is an industry veteran with 20+ years of

experience at Infosys, where he was a President and the global head of all service lines and digital sales. Ravi was also part of the localisation programme of Infosys in the US,

where the company hired 25,000 locals and visa independent staff during the 2019-22 period. We think that Ravi’s prior experience in creating an employee pyramid and onsite

development centres in the US could help Cognizant overcome its supply side challenges. Also read: After a dramatic 2022, will 2023 have any mercy on the EUR and

GBP? The growth issue is a much more nuanced problem and needs a more thoughtful strategy, including a possible beefing up of the sales force. In previous situations of

senior leadership changes in companies like Infosys and Wipro, we note the strategy often involved significant investments into sales and capabilities which yielded benefits with

a lag of 1-2 years.