By Sai Ishwarbharath B
BENGALURU (Reuters) – Software services giant Cognizant has appointed real estate management firm JLL as an adviser to find buyers for leasehold land tied to its globally largest facility by area located in Chennai, according to three people familiar with the matter.
The move to exit its Siruseri, Chennai facility comes after Cognizant in May unveiled a restructuring plan to cut costs by $400 million in two years, including giving up 11 million square feet in office space, or around 80,000 seats.
“This (plan to rationalize workspaces) enables us to invest in collaboration spaces in Tier 2 cities while creating structural savings for the future that we can invest in our people and growth opportunities,” the company told Reuters by email.
Teaneck, New Jersey-based Cognizant, which has two campuses in the facility owned by the State Industries Promotion Corporation of Tamil Nadu (SIPCOT), holds a long-term lease on the land which it plans to sell, one of the sources added.
JLL and SIPCOT did not respond to Reuters’ requests for comment.
The campuses sit on land spanning over 49 acres having 16,500 seats, according to the company’s presentations done for green energy certifications.
Industry watchers gave the move a thumbs-up.
It is an attempt “by Cognizant and other IT firms to decentralize their talent models to lower-cost locations,” said Peter Bendor-Samuel, CEO at research firm Everest Group.
“They are moving to smaller campuses and moving to take advantage of Tier 2-4 cities, which are often preferred by their talent and come with lower cost of living and lower cost to operate,” Samuel said.
He added that clients were indifferent to where employees sat if the service quality was maintained.
The focus on smaller cities also comes at a time when many IT employees are reluctant to move back to big cities after shifting to their hometowns during the worst of the pandemic.
(Reporting by Sai Ishwarbharath B; Editing by Dhanya Skariachan and Shweta Agarwal)
