Cognizant expects to incur $140 million to $160 million of the revised costs in 2026, with the remainder expected through the first quarter of 2027.
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Cognizant Technology Solutions has lowered its estimated costs for Project Leap, a restructuring programme that includes employee severance, even as its total headcount rose by 10,100 over the past year.
The company had previously estimated Project Leap costs at $230 million to $320 million, with substantially all the costs expected to be incurred in 2026, according to its second-quarter 2026 results. The revised estimate of $180 million to $250 million was disclosed in its third-quarter earnings, released on October 29.
Total headcount stood at 359,900 as of September 30, up 3,200 from June 30 and 10,100 from September 30, 2025, the company said.
Introduced earlier this year, Project Leap is designed to accelerate Cognizant’s transition to “the operating model of the future” by funding investments in integrated offerings, AI capabilities and partnerships, reshaping productivity through competitive offerings and upskilling its workforce. The programme also involves workforce restructuring, with employee severance and other personnel-related costs accounting for a substantial share of its estimated expenditure.
Cognizant expects to incur $140 million to $160 million of the revised costs in 2026, with the remainder expected through the first quarter of 2027. The estimate includes $150 million to $200 million in employee severance and other personnel-related costs, and $30 million to $50 million in other charges. The company did not disclose how many employees would be affected or in which countries.
In the third quarter, Cognizant recorded $51 million in Project Leap charges, including $46 million in employee separation costs. Charges for the first nine months of 2026 totalled $135 million, of which $102 million was related to employee separation.
Cognizant expects Project Leap to generate about $200 million in savings in 2026, which it says will be used primarily to fund investments in integrated offerings, AI capabilities and partnerships.
The company reported third-quarter revenue of $5.664 billion, up 4.6% year-on-year and 4.8% in constant currency. Net income rose to $627 million from $274 million a year earlier, when it was affected by a one-time, non-cash tax expense of $390 million related to the enactment of the U.S. One Big Beautiful Bill Act. Adjusted net income edged down to $670 million from $675 million.
Cognizant’s GAAP operating margin fell 60 basis points year-on-year to 15.4%, while its adjusted operating margin rose 30 basis points to 16.3%. The company excludes Project Leap charges from its adjusted operating margin.
Chief Executive Ravi Kumar S. said in the earnings release that “over 50% of our code” is now AI-assisted and that its associates have earned more than 95,000 frontier AI badges and certifications. He also cited continued improvement in revenue and adjusted operating income per employee.
Chief Financial Officer Jatin Dalal said the company achieved its third-quarter results while investing in strategic partnerships and AI skilling initiatives and integrating recently completed acquisitions.
Published – October 30, 2026 08:00 am IST
