Cognizant Technology Solutions to cut 4,000 jobs amid Project Leap announcement—Is AI driving the move?

According to a report by Mint, citing sources familiar with the matter, the move comes as IT firms increasingly prioritise cost optimisation and prepare for a future where automation plays a larger role in daily operations.

While Cognizant has not officially disclosed the exact number of employees impacted, its management indicated during a post-earnings analyst call that over 20,000 freshers are expected to join the company this year—hinting at a likely reduction in mid-level roles.

The restructuring aligns with the company’s recently launched ‘Project Leap’, an ambitious initiative aimed at accelerating its transition to a future-ready operating model. The programme focuses on boosting investments in integrated offerings, strengthening AI capabilities and partnerships, enhancing productivity, and upskilling the workforce.

“In fostering a workforce that is appropriately sized, AI-enabled, and equipped with the skills required for future success, while optimising our technology footprint, we aim to streamline operations and drive productivity through AI-led efficiencies,” Cognizant said in a statement.

The company expects Project Leap to generate savings of approximately $200 million to $300 million in 2026. These savings, net of planned investments, are projected to support an increase in its 2026 adjusted operating margin guidance—from an expansion of 10–30 basis points to 20–40 basis points, in line with its long-term margin expansion goals.

As part of the initiative, Cognizant anticipates incurring costs between $230 million and $320 million, largely in 2026. This includes $200 million to $270 million in employee severance and personnel-related expenses, along with $30 million to $50 million in other charges.