Cognizant recently posted its first quarter earnings and buried a significant announcement inside the financial disclosures. The IT services company introduced Project LEAP, a restructuring program that, based on the numbers it disclosed.
Cognizant said it expects to record costs of US $230 million to US $320 million in connection with project Leap, with substantially all of the costs expected to be incurred in 2026. That figure consists of US $200 million to US $270 million in employee severance and other personnel- related costs, and US $30 million to US $50 million in other charges.
The company did not confirm a specific headcount number, but the mathematics did it all.
What the numbers suggest
Cognizant has not officially stated how many employees will lose their jobs. According to multiple reports, the estimated scale of layoffs is based on projected severance payouts and average employee compensation levels across regions. Using an estimated average salary in India, it is being estimated that around 12,000 to 13,000 India-based employees could be affected.
With global headcount closer to 357,600 employees, a reduction of 15,000 represents close to 4-5% of Cognizant’s total headcount. The number is large enough to reshape the organization but not large enough to operationally destabilize it, which is precisely why fits the profile of a managed restructuring rather than a crisis response.
Higher compensation levels in markets such as the US would mean fewer employees affected for the same cost pool. In practical terms: the same severance budget that eliminates 12,000 to 13,000 roles in India might only affect a few hundred in the United States. The arithmetic of global labour arbitrage, the very model that built Cognizant, is now the same mechanism determining who gets cut.
What is Project LEAP?
Cognizant introduced Project Leap alongside its Q1 2026 results, saying it expects the program to generate US $200 to US $300 million in savings in 2026 and drive full-year adjusted operating margin guidance to 16.0% to 16.2%.
CEO Ravi Kumar S has framed Project Leap as a structural shift, not a cost exercise. Kumar stated that the company is on the journey to get to the operating model, with the goal of reshaping the talent pyramid as digital labour, software and AI, starts handling jobs that once went to people.
Kumar also disclosed that the company has more than 5,000 AI engagements underway and that nearly 40 percent of code is now being AI-assisted. That figure is notable. It means automation is already doing measurable work across Cognizant’s delivery operations. Project Leap formalises the logical next step: shrinking the human workforce to match.
CFO Jatin Dalal told analysts that Project Leap is about driving cost savings through a “cost of delivery” model — fewer humans per unit of work.
The roles at risk
Project Leap targets roles in application maintenance, business process outsourcing, and traditional IT support ; functions that automation tools have increasingly taken over.
These are not niche positions. They represent the bulk of entry and mid-level employment at most Indian IT services firms. CEO Ravi Kumar S aims to build a “broader and shorter pyramid,” with fewer entry-level positions, fewer middle-level positions, and more digital tools and AI-driven delivery.
Engineers with six to twelve years of experience in routine roles like manual testing, basic application support, traditional database administration, and standard development work, may face the highest risk. These are precisely the roles that AI tools can either fully automate or augment to the point where one engineer does the work of three.
The irony is pointed. For two decades, India’s IT sector built its global dominance on exactly those roles. Now those roles are the first on the list.
India – where the impact might land
Cognizant employs over 250,000 workers in India. India accounts for approximately 72 percent of the company’s global workforce. That concentration is why the country faces a disproportionate share of the restructuring impact.
A substantial portion of the job cuts is expected to be concentrated in India, where the company has its largest workforce and where cost structures allow for broader adjustments. Cities like Bengaluru, Hyderabad, Pune, and Chennai — which built entire ecosystems around IT employment — might feel the impact directly.
There is also a timing complication. Cognizant simultaneously announced it will hire more than 20,000 freshers in 2026. That appears contradictory at first. But it is not. Technically if we observe the industry pay scales, freshers cost less, carry no legacy habits, and can be trained directly on AI-first workflows. The company is not abandoning hiring, but it is restructuring who it hires and at what level in the pyramid.
A pattern across the sector
Cognizant is not doing this alone. Tata Consultancy Services laid off approximately 12,000 mid-level and senior managers in July 2025, citing essentially the same reason: workforce mismatch with new technology demands. Globally, more than 40,000 tech sector employees lost their jobs to AI-driven restructuring in April 2026 alone.
Freshworks revealed an 11% workforce reduction plan due to AI product and engineering changes. Atlassian announced a reduction in its employee base by 10%. Coinbase announced layoffs accounting for 14% of its workforce.
This is not a cycle. It is a structural shift. The workforce models that sustained India’s IT industry for twenty years — large pyramids of developers, testers, and support staff — are being replaced by leaner teams augmented by AI tools.