Less than two weeks later, Cognizant Technology Solutions Corp. was rocked by the departure of the two leaders, tasked with overseeing the entire $18.5 billion business, forcing it to hire new chiefs. Had to be, for the third time under Chief Executive Brian Humphries.
First, Ursula Morgenstern, president of Global Growth Markets, stepped down in the second week of June, according to an executive privy to growth. Morgenstern, who was hired in December 2020, oversaw Cognizant’s $3.5 billion in revenue from Europe and $1.3 billion in business from emerging economies. Cognizant then sacked Gregory Heitenrach, who was in charge of business in the US, in what it said was “disproportionate behavior with company policy”.
US customers accounted for the remaining three-quarters of Cognizant’s $18.5 billion in revenue in the year ended December 2021. Cognizant appointed Rob Walker as Morgenstern’s successor and Surya Gumadi as interim head of state for the US.
Humphries, who was appointed CEO in February 2019, first assigned DK Sinha as head of US business in 2019. He also made Santosh Thomas in charge of Global Growth Markets in the same year. Both officers soon resigned.
Thomas left in 2020 and was succeeded by Morgenstern. Sinha resigned last year, prompting Cognizant to hire Heitenracht from Vodafone plc.
“Apart from high job losses at junior level, Cognizant is the only large IT services company facing a senior management churn,” said a Mumbai-based analyst with a domestic brokerage, who spoke on condition of anonymity. Leadership clearly has a huge impact as it not only affects customer relationships but creates further instability in the senior management team.”
Beyond the old guard, 17 of the 18 senior executives listed in the 2019 annual report have dropped out of Cognizant since Humphreys took office. Rather, Humphries now finds himself in a unique situation where even the senior executives he’s hired are heading to the exit.
Humphries assigned Prasad Chintamaneni as head of the banking and financial services business division. Banks account for a third of Cognizant’s total business. Chintamaneni stepped down, after which Daniel Cohen was appointed in 2019. Cohen was sacked in September last year. Cognizant appointed Pradeep Shillige as Head of Global Delivery in 2019; Schillige stepped down in September 2020, with the company appointing Andrew Stafford as his successor.
The Mint first reported on Humphries’ struggle to build a stable leadership team on September 27.
“With a company of our size and scale, we will see changes in our executive talent over time, driven by a variety of reasons, including the continued growth and development of businesses, or people changing their career journeys. We have a deep Executive Bench has a strong focus on succession management, and will continue to grow our team with high-performing, skilled leaders as we move toward realizing our vision of becoming a pre-eminent technology services provider. 2000 C-suite,” said a Cognizant spokesperson.
From 6 February 2019, when Humphries was named as Francisco D’Souza’s successor, and 29 June 2022, Cognizant’s market cap has declined by 8.1% to $35.7 billion. This, despite the company spending $4.6 billion and $1.4 billion, respectively, on share repurchases and dividends over the past three years. In comparison, the shares of Accenture Plc, Infosys, Tata Consultancy Services Ltd and Wipro Ltd were up 76.5%, 65%, 59% and 14.7% respectively during the same period. One former executive said, “Last year our organic revenue growth was less than 6%. First, you should have hired the best people. Once you join, you realize that still There is no concrete strategic direction. The only option is to leave and join another company when the market is still doing well.”
Mid- and lower-level employees have also suddenly laid off, with Cognizant reporting a 29% drop during the January-March period.
High attrition is hurting growth: Cognizant’s full-year revenue jumped 11% last year, following a 0.76% drop in 2020 and a 4% increase in 2019. In contrast, Infosys under Salil Parekh posted revenue growth of 7.9%, 8.3%, up from 6.1% and 20.3% in FY19, FY20, FY21 and FY22, respectively.