Cognizant withdraws 2020 growth forecast. Check details
IT services major Cognizant on Thursday said it is withdrawing its growth forecast for 2020 given the uncertainty in environment amid the coronavirus outbreak. The US-based company, which has over two lakh employees in India, said it expects its March quarter revenue to be within its previously guided range of 3.4-3.6 per cent growth (in constant currency) from the year-ago period.
"The long-term fundamentals of our business remain strong. However, given the unprecedented nature of this crisis, uncertainty around its duration and its impact on our ability to forecast performance, the company is withdrawing its 2020 guidance that was provided on February 5, 2020," Cognizant said in a statement.
Cognizant will announce its first quarter financial results on May 7.
For 2020, Cognizant had said it expects its revenue growth to be in the range of 2-4 per cent in constant currency.
The company said that entering the second quarter, it expects the pandemic to further reduce client demand as its societal and economic impact causes broader disruptions across industries.
"We acted decisively to limit COVID-19's impact on our business, including rapidly enabling work-from-home capabilities across our delivery teams.
We will continue to take steps to protect our associates and support the evolving needs of clients in today's environment," Cognizant Chief Executive Officer Brian Humphries said.
Cognizant noted that its financial performance in the months of January and February was "on track to exceed previous guidance", driven by strong performance across the North America market.
During the latter part of March, COVID-19 increasingly affected Cognizant's business, it added.
This was largely due to delays in project fulfilment as delivery, particularly in India and the Philippines, shifted to work-from-home, and there was reduced client demand, primarily in the travel and hospitality industries, the company said.
Cognizant had previously said its employees in India and the Philippines, who are at associate level and below, will receive an additional payment of 25 per cent of their base pay for April.
The move is expected to benefit over 1.30 lakh Cognizant employees in India.
Additionally, Cognizant has standardised 14 days sick-leave coverage globally for COVID-19 cases or self-quarantine without impacting other sick leave or vacation programs.
