New Jersey-based IT major Cognizant Technology Solutions announced higher bonuses for its 2.19 lakh employees after reporting its biggest jump in quarterly revenue in three years. Cognizant, whose two-third employees are based in India, also raised its annual sales guidance for the third straight quarter on Wednesday.
“I’m sending a note out to our entire company right after this call, saying that because of what they’ve delivered on revenue growth, what they’ve delivered on operational performance, we’re going to share those rewards and pay out bonuses well above last year,” Cognizant President Gordon James Coburn told analysts in an earnings call.
Cognizant expects its revenues to rise to $12.41 billion in 2015, up from August forecast of $12.33 billion. Cognizant raised its guidance at a time when its India-based rivals such as Infosys are predicting muted growth in the December and March quarters.
Cognizant’s Q3 revenue of $3.19 billion was up 3.3 per cent over Q2, while operating margin of 19.4 per cent was within the target range, said CEO Francisco D’Souza.
Cognizant’s operational numbers were strong, but employee attrition remained high at 20 per cent. During the quarter, Cognizant added just 1,300 net employees. Cognizant said attrition was above “desired level”, but added that high churn in the IT sector was an industry-wide problem.
Offshore utilization increased by almost 300 basis points sequentially to approximately 76 per cent; excluding trainees, utilization was approximately 81 per cent, Cognizant said.
Cognizant said its brand has never been stronger and has been validated by the success seen in global campus recruiting program this year.
“In India this year we saw tremendous success in our campus hiring across premium engineering campuses. On campuses where students receive multiple offers from Cognizant and other tier 1 companies, on average 75 per cent of those students chose Cognizant over others,” Mr Coburn said