Cognizant, a leading information technology services company, said it is pushing back many of its campus offers valid this year to 2009.
"We are pushing a small proportion of our campus offers over to the next year as we have achieved our original growth gains through recruitments for this year," a Cognizant spokesperson said, without specifying the numbers. He maintained that the company would honour every single offer made on campus, including the level of compensation offered to prospective joinees.
"This year, fresh graduates across disciplines — engineering, management, science and humanities — started joining us, as usual, in the June-July timeframe. However, consistent with the rest of the industry, we have extended the joining dates over a somewhat longer period due to the economic environment," the spokesperson said.
"Our policy has always been to absorb fresh graduates over a period of time following their graduation, and this year was no different. Of course, each year, we stagger the joining dates in order to accommodate our business needs and also based on our capacity to provide them the required training to transition to our practices."
Cognizant conducted 2,700 campus recruitments in the third quarter ended September 30, and is reasonably bullish about meeting its revenue growth target of 31.6 per cent in the quarter ending December 31, which marks the close of the financial year in Cognizant's books.
This is a downgrade from the earlier growth outlook of 38 per cent even as the industry expects its results to be adversely affected by the battering on the financial services front. The company has given a revenue guidance of around $2.81 billion for 2008.
The weakening financial sector has seen leading IT vendors like TCS, Wipro, Infosys and Patni cite the credit squeeze, slower sales cycles, delays in project ramp-ups, and strained pricing power as impediments to future growth. IT firms have been hoping that vendor consolidation through mergers and acquisitions and network and IT architecture integration will steady demand from the financial services market. On the other hand, research firm Forrester expects the US financial services industry to cut its IT purchases by 3 per cent in 2008 and 4 per cent in 2009.
Good sequential growth rates were posted by Wipro (7.8 per cent), Cognizant (7.9 per cent) and Infosys (3 per cent) in the key financial services vertical during the quarter ended September. While on the compound annual growth rate (CAGR) front, Cognizant has scored higher than fellow SWITCH (Satyam, Wipro, Infosys, TCS and HCL) vendors, recording CAGR of about 56 per cent in the last five years.
"If the pace of financial consolidation does not pick up into the first quarter of 2009, we will see companies placing their bets on Europe even more. We could see an increased focus by Tier-I IT firms on the retail and manufacturing sectors in northern Europe as they target deals in $30 million-$50 million range," said an industry analyst. Forrester had recently revised downward its 2009 overall US IT spending forecast. It is now projecting mere 1.6 per cent annual growth in US IT spending for next year, down from 4.1 per cent in 2008.
Further, the demand for tech consulting and systems integration from the financial sector is expected to drop to 2.2 per cent in 2009.
