Cognizant to expand India facilities, grow global staff

Cognizant Technology Solutions, a provider of offshore outsourcing services, plans to increase its presence in India next year by building new facilities and to grow its global headcount by over 40 percent, the company announced Monday.

Cognizant, based in New Jersey, plans to expand its campuses in the cities of Pune, India, and Chennai, India, and build its first facility in Bangalore, India, said Larry Gordon, a company spokesman.

The company currently both owns and leases space in Pune and Chennai, while the situation is different in Bangalore, where Cognizant leases space and doesn't own real estate, he said.

The plan is to move the employees working in leased space in these three cities to Cognizant-owned facilities, he said. Exiting the leased space is expected to save the company about US$10 million annually in operating expenses, according to Cognizant's Monday press release.

Cognizant expects to spend about $40 million over the next two years in this new construction program, which is expected to begin early next year and yield a total over 600,000 square feet of space, the company said.

Cognizant also has operations in Calcutta, India, and Hyderabad, India, where it leases space and where it has no current plans to build its own facilities, Gordon said.

Cognizant currently has about 9,000 employees and plans to hire about 4,000 in 2004, a headcount increase of about 44 percent, the company said in the release. About 7,500 of Cognizant's 9,000 employees are currently based in India, Gordon said. The company also has smaller application development centers in Phoenix and Ireland, he said.

The company's construction plans and increased headcount reflect its revenue growth, he said. In its third quarter ending Sept. 30, revenue grew 60 percent compared with the same quarter last year.

Cognizant provides a variety of IT services, and specializes in application development and application management, he said.

The company also announced Monday that founder, Chairman and Chief Executive Officer Kumar Mahadeva will retire, effective April 1, 2004. He has overseen the company's growth since it was founded in 1994 as a 50-person division of Dun & Bradstreet. Lakshmi Narayanan will take over as CEO and retain his current title of president. John Klein, a board member since 1998, will replace Mahadeva as chairman.

Meanwhile, Narayanan is passing on his chief operating officer title to Francisco D'Souza, senior vice president of North American and European operations.

The company's stock (CTSH) was down 0.54 percent to $42.17 in mid-day trading on the Nasdaq exchange.

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