Cost issues a big hurdle for Cognizant growth story, say analysts

Though reducing headcount will help control cost, the CEO has to overcome the cultural issues associated with the layoffs.

Despite its move to optimise the employee pyramid for bringing back growth, analysts are of the opinion that Cognizant is not out of the woods yet. 

While cost control can be one of the possible options for sustaining margin and pushing growth, Cognizant’s challenges seem to be multifold.

Underperformance of its two key verticals – financial services and health care – contributing more than 60 per cent of its total revenues, is one of the major reasons behind the Nasdaq-listed firm’s current woes. Even client-specific issues and pricing pressure on the legacy side of the business are other challenges the company has