As AI disrupts the traditional IT services model, Cognizant on Wednesday announced Project Leap, a new programme for AI-led delivery in the future that not only involves investments in AI capabilities & partnerships and workforce reskilling but will also see the company lay off workforce.
Project Leap: costs and restructuring impact
Describing Project Leap as a transformation programme, Cognizant said it expects to incur costs of $230- $320 million in 2026, including $200-$270 million in employee severance and other personnel-related costs, and $30-50 million in other charges.
Cognizant did not quantify the number of employees who may be impacted by this. However, CFO Jatin Dalal told media persons that it involves “investment in the form of severance that we’ll have to pay, and it’s a global programme and various parts of the organisation will get impacted”. Industry analysts said the impact could be in the “several thousands,” given the specified severance costs and the number of employees.
Savings, margins and AI investments
Cognizant expects the initiative to lead to cost savings of $200-$300 million in 2026, which it says will be used to fund investments in AI capabilities and to upskill and reshape its workforce’s productivity. It also expects margins to expand by 20 to 40 basis points due to Project Leap.
“This is a programme which is focused on the interdisciplinary skill sets that we need to succeed in the future that we will have to invest in. It will have an investment in the form of severance that we will have to pay and it’s a global programme and various parts of the organisation will get impacted,” Dalal said.
Workforce strategy and operating model shift
The US-headquartered IT company, which has a significant Indian workforce, had a headcount of 3,36,300 as of March 2026.
In an earnings call, Ravi Kumar, CEO of Cognizant, said that the restructuring is part of the company’s goal of a ‘broader and shorter’ pyramid with fewer layers of management and a wider base of junior employees who are AI-native.
“We have a frame of what our future operating model looks like and Project Leap is to make sure we get to that operating model faster. It is an opportunity to broaden our workforce pyramid with more school graduates so that we can build the critical AI expertise faster,” he said.
He added that the project’s savings will give the company the resources to invest in AI and future technologies, enabling it to seize opportunities ahead of others.
Hiring plans and past restructuring moves
Interestingly, Project Leap commences at a time when Cognizant has added around 21,000 net headcount from March 2025 to 2026. It has also reiterated its plans to hire more than 20,000 freshers in 2026, similar to the number of freshers it added in 2025.
“This is a programme which is focused on the skill set, the technical and the interdisciplinary skill sets that we need to succeed in future that we’ll have to invest in,” Dalal said.
Cognizant had previously undertaken the NextGen programme in 2023, during which the company incurred costs of around $300 million in personnel-related actions, impacting approximately 3,500 employees. Earlier, in 2020, it embarked on a ‘Fit for Growth’ Plan, designed to cut costs and streamline operations. This programme cost the company approximately $150-$200 million, resulting in the reduction of roughly 7,000 mid-to-senior level employees.
Published on April 29, 2026