Cognizant Rolls Out Project Leap as a Major Workforce Reset to Fund AI Shift

IT services firm Cognizant has unveiled Project Leap, a company-wide transformation programme aimed at accelerating its shift to an AI-first operating model, while tightening costs and improving productivity.

The initiative, announced alongside the company’s March quarter results, is designed to fund investments in AI capabilities, integrated offerings, and strategic partnerships, while reshaping its workforce.

“By fostering a workforce that is properly sized, AI-enabled and possesses the skills required for success as well as optimising our technology footprint, we aim to streamline operations and enhance productivity through AI-led efficiencies, creating a more agile and cost-effective operating model,” the company said in a statement.

Cognizant expects the programme to generate between $200–300 million in savings in 2026, which will be reinvested into AI and transformation efforts. 

However, the transformation will come with upfront costs. The company expects to incur $230–320 million in charges, largely tied to employee severance and related expenses, signalling a restructuring of its workforce as it pivots toward AI-led delivery.

According to a Mint report, the company is planning a fresh round of job cuts, and may lay off 4,000 employees—or roughly 1% of its global workforce.

Financial Performance

For the quarter ended March 31, Cognizant reported revenue of $5.4 billion, up 5.8% year-on-year or 3.9% in constant currency, placing growth in the upper half of its guidance range.

The GAAP operating margin, which measures the percentage of revenue remaining after covering operating costs, declined 110 basis points to 15.6%, while the adjusted operating margin saw a marginal uptick of 10 basis points. Net income remained largely flat at $662 million, compared with $663 million a year earlier.

Earnings showed stronger momentum on an adjusted basis, with adjusted earnings-per-share rising 13.8% year-on-year to $1.40.

The company reported 21% year-on-year growth in bookings in the quarter under review, supported by seven large deals —deals with total contract value of $100 million or greater—including one mega deal exceeding $500 million in total contract value. 

“We believe our AI builder strategy, deep industry expertise and scaled partnership ecosystem uniquely position us to bridge the AI velocity gap by helping clients convert their significant AI investments into tangible business outcomes,” noted Cognizant Chief Executive Officer Ravi Kumar S in a statement.

Cognizant maintained its 2026 full-year constant currency revenue growth guidance of 4% to 6.5%, indicating steady demand despite macro uncertainties. It expects full-year revenue in the range of $22.1 billion to $22.6 billion.

Meanwhile, savings from Project Leap have enabled the company to raise its full-year adjusted operating margin guidance by 20–40 basis points, up from its earlier forecast of 10–30 basis points.

Cognizant’s latest move follows a broader shift underway in the IT services sector, where firms are increasingly investing in AI to drive productivity gains while rebalancing headcount-heavy operating models.