Cognizant returns to double-digit growth with $18.5 billion 2021 take

Global ICT consultancy Cognizant has returned to double-digit growth for the first time since 2015, supported by a now 330,000-strong headcount.

Global technology consulting and professional services firm Cognizant has recorded $18.5 billion in worldwide revenues for 2021, driven by its highest ever quarterly earnings of $4.8 billion achieved over the last quarter. Up from revenues of $16.7 billion in 2020 – which was flat on the year prior due in part to the business impacts of Covid-19 – the latest results mark a return to double-digit growth for the first time since 2015.

While North America remains the consultancy’s stronghold, up by 8.4 percent in constant rates and accounting for around three quarters of total revenue, its Europe and the ‘rest of the world’ markets had a bumper year, growing respectively by 14 and 18 percent to a combined worth of almost $5 billion.

As perhaps a sign of growing regional post-Covid confidence, Cognizant’s European practice grew by a massive 35 percent year-on-year in the fourth quarter.

As to segments, Financial Services, its biggest money-spinner at $6.1 billion, witnessed the slowest growth of 6.3 percent, although bounced back considerably in the last quarter with year-on-year growth of 18.8 percent. Healthcare generated the next most revenues, up by 10 percent to $5.3 billion, followed by Products & Resources ($4.3 billion, up 14 percent) and Communications, Media & Technology, which grew by 13 percent to $2.8 billion.

Much of the growth across segments was driven by a demand for and adoption of digital services and technologies, leading to strong growth in sectors such as life sciences, banking and insurance, and manufacturing and logistics. Digital altogether grew by 20 percent across the year, up by two points to 45 percent as a proportion of total revenue. The company has stated that it aims to push that figure out to 60 percent in the coming years.

“I’m proud of Cognizant’s broad-based progress over the past year. We successfully executed our strategy by meaningfully enhancing our digital portfolio, strengthening our international presence, and helping our clients be successful,” said Brian Humphries, the CEO of Cognizant since 2019. “We enter 2022 with momentum and confidence that our talented employees position us to capture the substantial market opportunity.”

In addition to a record fiscal year, Cognizant has also assembled its largest ever workforce, with the net increase of 41,000 people over the course of 2021 pushing the firm’s headcount past the 330,000 mark – albeit with a troubling voluntary attrition rate sitting at above 30 percent during the back half of the year. More than 200,000 – or almost two thirds of Cognizant’s employees are based in India, including 30,000 of its recent hires.

Looking ahead, the firm is forecasting growth of between 8.5 and 11.5 percent for 2022, figures which would bring in up to $20.5 billion in revenues. “During 2021, we continued to invest in our people and strategic initiatives while navigating the heightened cost pressures driven by the labour supply-demand imbalance,” said Cognizant CFO Jan Siegmund, who added that the firm was well-positioned to execute its capital allocation framework.