During his first shareholder address, on 21 April 2023, Ravi Kumar Singisetti, who had taken over as Cognizant Technology Solutions Corp.’s chief executive three months earlier, made a definite statement of purpose.
“I am excited and humbled by the opportunity to lead Cognizant, a company I have long admired, into its next era of growth,” he said.
Three years later, he appears to have delivered on that promise—the IT services company is indeed leading on many parameters. Last year, it reportedly secured three mega deals valued at a billion dollars or more and grew the fastest among India’s largest tech services firms.
While the company’s revenue grew 7% in 2025 to $21.1 billion, rivals Infosys Ltd. and HCL Technologies Ltd. grew 4.6% and 6%, respectively, in 2025-26. Tata Consultancy Services Ltd (TCS) and Wipro Ltd fared worse, reporting revenue declines.
Unlike the Indian IT companies, Cognizant, which is based out of Teaneck, New Jersey, follows the calendar year when reporting financial performance.
Apart from HCL Technologies, Cognizant has also outperformed its peers since Kumar took over in January 2023. Cognizant has since recorded a compound quarterly growth rate of 0.87%. TCS and Infosys grew at 0.58% and 0.61%, respectively, whereas Wipro reported a decline of 0.43%. HCL Technologies has outperformed them all, with a compound quarterly growth rate of 0.98%.
Cognizant’s investors are being rewarded as well. Shareholder returns, totalling $2.6 billion in 2026, is the highest in six years. And yet, they remain unhappy.
The company’s shares hit a six-year low on 13 May, closing at $45.97 apiece on Nasdaq. Cognizant’s market capitalisation of $21.78 billion was also at its lowest that day. It was not a sudden dip. The company’s shares have fallen more than 38% since this year, more than that of TCS, Infosys, HCL Technologies, and Wipro, each of which fell between 30% and 33%. And as part of a quarterly rebalance, Cognizant was even dropped from the Nasdaq-100 index, which includes the 100 largest non-financial companies.
The pertinent question then: Why are investors not impressed by Kumar’s show?
How he navigates this period of uncertainty will have a bearing on how Indian IT services firms, and their leaders, navigate similar challenges going ahead—these headwinds span changing markets, tech landscapes, business models and investor perceptions.
The right moves
Cognizant appears to have made all the right moves.
It has acquired companies to boost capabilities around artificial intelligence (AI) while partnering with AI-native firms.
On 29 April, the company announced the acquisition of Astreya—a California-based IT services firm that manages data centre and AI lab infrastructure for large technology companies including Microsoft, Amazon, Alphabet, Apple, and Nvidia—for $600 million.
Since Kumar took over, Cognizant has also shopped more as compared with its peers in India, spending at least $2.6 billion on five acquisitions. TCS, in contrast, spent at least $1 billion; Infosys $1.3 billion; Wipro $0.88 billion, and HCL Technologies $0.94 billion in the same time frame.
Cognizant, meanwhile, has doubled the buyback limit to $2 billion in the current year to woo shareholders.
A question of relevance
To understand investor anxiety, we have to go back to the beginning of 2026.
Anthropic and OpenAI announced new AI models and upgrades to existing ones. These models can now handle complex tasks, such as framing a sales pitch and live-tracking of inventory without human intervention. Such developments have made investors worried; many of them now question the relevance of IT services companies.
Shares of Indian IT companies have fallen more than 4% on at least three occasions since the beginning of the year.
First in January, when Anthropic announced new plugins to existing AI software that can autonomously track, review and summarise legal documents, or link themselves directly to data dashboards and spreadsheets to analyse trends and generate financial models.
Two months later, the chief executives of India’s largest IT services companies admitted to AI-led revenue deflation, sending their shares into a free fall.
The third instance occurred in May, when Anthropic and OpenAI partnered with private equity firms including Blackstone, TPG, Advent International and Bain Capital to enter the software services space.
“Cognizant is on the wrong side of the AI trade. Investors are convinced that AI will destroy their business,” says Peter Bendor-Samuel, founder of Everest Research.
“The market is rewarding companies perceived as AI platform owners and penalizing firms whose revenue is still largely tied to people-based delivery models,” adds Phil Fersht, founder and CEO of HFS Research. “Even when Cognizant announces strong AI partnerships or acquisitions, investors want evidence that AI will materially change its business model, not just improve its productivity.”
Cognizant’s Nasdaq listing also plays a part in its tepid market performance.
“Due to its US listing, Cognizant is heavily exposed to foreign investors who are giving precedence to AI-led companies and the notion that AI may cannibalize IT services work,” says Sushovon Nayak, lead IT analyst at Anand Rathi Institutional Equities.
This sort of view is not as pronounced in India. “Domestic institutions are supporting Indian IT stocks even as foreign institutional investors are selling. This is not the case with US-listed services companies,” adds Nayak.
To capitalize on the cushion offered by Indian institutions, Cognizant is weighing plans to list its shares in India. One key reason is the attractive valuation. Despite reporting broadly similar revenue, Infosys commands a price-to-earnings ratio of around 16, higher than Cognizant’s 11, a gap that reflects the market’s higher confidence in Infosys’ growth prospects.
Kumar’s record
The AI-led hysteria is causing a dent in Kumar’s tenure.
Over his three-and-a-half years’ tenure as CEO, Cognizant’s compound quarterly growth rate totalled nearly 0.9% whereas its shares fell 21.6%. On both metrics, predecessor Brian Humphries performed a tad better—during his four-year stint beginning 1 April 2019, Cognizant grew at 1.1% while its shares fell 17.1%.
Kumar is certainly battling hurdles his predecessors did not—the rise of automation tools being the prominent one. With each new wave of announcements, investors have become even more jittery.
The change
Cognizant, meanwhile, is changing the way it does business.
For one, Cognizant is allowing AI agents to access its flagship healthcare platform, expanding its access from people to AI tools to increase its market.
“We always have sold TriZetto (Cognizant’s healthcare platform) on a per-member, per-month basis… Now, that IP is exposed to the whole agentic workforce of the world. Anybody can come in and tap that IP and we have an opportunity to monetize that interface,” Jatin Dalal, Cognizant’s chief financial officer, said during the company’s AI Forum in New York on 5 June.
Last year, Cognizant earned about a third of its $21.1 billion revenue from healthcare and health sciences companies. It does not disclose its standalone revenue from TriZetto.
Cognizant’s management also stated that the company would have a flatter employee pyramid.
“The pyramid structure that we currently have today is almost no longer relevant,” Kumar said during the AI Forum. “I think we’re going to a much flatter organization. It's going to be a much wider organization. We’re going to have a lot more agents at the bottom, a lot more interdisciplinary skill sets that are needed for the future. So, in that sense, the middle layer essentially will be doing more of a player-coach kind of thing.”
The company, like Infosys, launched two new job roles: frontier certified engineers and frontier business operators. These are engineers working in client locations who have sales and consulting expertise. While frontier certified engineers figure out and redesign areas where automation can change business processes, frontier business operators run those redesigned processes daily, managing a mix of human workers and AI agents to deliver results.
“The introduction of frontier engineers and operators, combining domain expertise with technical and operational fluency, reflects a shift toward higher-value roles within the delivery model. With a flatter workforce, we think Cognizant will continue to grow revenue per employee,” said Keith Bachman, an analyst at BMO Capital Markets, in a note dated 8 June.
Cognizant’s revenue per employee jumped 6.3% on a yearly basis to $61,324 at the end of last year.
“We believe Cognizant’s services mix will evolve as a result of AI. More specifically, traditional application services and SaaS implementation are expected to decline as a percentage of the portfolio, while AI-enabled operations, engineering, AI infrastructure, and verticalized solutions grow in importance,” added Bachman.
Employee cuts
While Cognizant’s headcount rose by 6,000 from the October-December quarter to 357,600 at the end of March 2026, workforce rationalization, including job cuts, would be the order of the day as AI takes hold of company processes.
Recently, the company announced it would initiate a transformation programme and outlined up to $270 million in employee severance and other personnel-related costs. The company is expected to lay off at least 4,000 employees, or about 1% of its workforce, according to sources.
Employees without a project for 35 days are being told to leave.
“I was called by HR to resign immediately as my time at the bench crossed a month. They offered me two months of notice period pay and three months of salary,” says an employee who had been with the company for at least three years. The employee didn’t want to be identified.
Traditionally, employees serve a notice period of about 60 days before leaving the firm. However, Cognizant has been increasingly asking benched employees to leave without serving the complete period.
A second employee with over seven years at Cognizant says he was asked to prepare a list of employees who could be “released” from a project—particularly those with low ratings.
He adds that the company was planning to give severance based on the number of years spent in the company. “I am told that employees would be given 15 days of salary for each year spent in the company, which equates to two months of severance for a person who has been in the company for four years.”
“Your repeated queries regarding rumours and severance were also previously addressed (May 21)— we do not comment on rumours. Cognizant follows all applicable contractual provisions, including compensation in lieu of notice period,” a Cognizant spokesperson said in response to Mint’s email dated 6 June.
The layoffs at Cognizant are not isolated events. TCS and Oracle too recently laid off employees citing the rise of automation as a reason. In July last year, TCS announced it would cut about 12,200 roles, or about 2% of its workforce. Oracle recently announced the departure of around 30,000 employees, or roughly 18% of its global workforce.
Unanswered questions
The restructuring of manpower at Cognizant isn’t that reassuring to investors yet. Fersht says that investors want proof of Cognizant selling more platform-led offerings and AI-powered managed services than peers. Also, proof of productivity gains translating into margin expansion rather than simply lower pricing.
“Cognizant has many of the building blocks in place. The question investors are asking is whether the company can make that transition quickly enough to stay ahead of a rapidly changing market,” adds Fersht.
Cognizant, meanwhile, is trying its best to convince investors.
Over the past month, the management has engaged with analysts and investors on three different occasions, addressing concerns about growth in the AI age and, more importantly, declining share prices.
“Going forward, we might see more of these investor and analyst engagements by homegrown IT services firms even,” says Pramod Gubbi, founder of Marcellus Investment Managers, Cognizant. “As Indian IT services firms continue to execute projects, they will continuously look to demonstrate that they are not just coming up with AI blueprints or building capability. Instead, AI is creating a new range of services and new work streams. Only this can change the narrative.”
