Version 1: Cognizant lowers its 2026 growth forecast again as clients go slow on new tech work

The US IT company, with most of its staff in India, beat Indian rivals last quarter but expects clients to spend less in the last three months of 2026.

Here is a strange pair of facts. Cognizant, an IT company with lakhs of workers in India, grew faster than TCS, Infosys and HCL Tech in its latest quarter. Yet on Thursday, 29 October 2026, the same company lowered its own forecast for the whole year. This was the second cut this year.

If you are a fresher waiting for an IT offer letter, or you already work in a tech park in Chennai, Pune, Bengaluru or Hyderabad, this news is worth a few minutes. Here is the story in simple words.

First, who is Cognizant?

Cognizant writes and runs software for big companies like banks, hospitals and shops, mostly in the US and Europe. Its head office is in Teaneck, New Jersey, in the US. But the company was born in Chennai in 1994, and India is still its engine room.

About three fourths of its employees work in India. At the end of September 2026, the company had 3,59,900 people on its rolls.

One more thing to know. Cognizant counts its year from January to December. Indian IT companies count from April to March. So its "third quarter" is the same July to September period that Indian firms call their second quarter.

What happened in July to September?

The numbers were decent. Revenue, which means the total money earned from customers, was $5,664 million, up 4.6% from a year ago. Profit was $627 million.

Compared with the three months just before, Cognizant's revenue grew 3.3%. In the same period, TCS grew 0.2%, Infosys grew 1.2% and HCL Tech grew 2%. Wipro's revenue fell a little. So on the scoreboard, Cognizant was ahead of the big Indian names.

Bar chart of revenue growth from April to June to July to September 2026: Cognizant 3.3%, HCL Tech 2%, Infosys 1.2% — Cognizant grew faster than the big Indian IT names from one quarter to the next.

So why lower the forecast?

Every big company tells the world, at the start of the year, how much it expects to grow. This is called guidance. Think of it like a batting side announcing its target score before the innings. If the pitch turns slow, the captain says, "We may reach a bit less now."

At the start of 2026, Cognizant said it would grow 4% to 6.5% this year. In July, it cut this to 4% to 5.5%. Now it says 4% to 4.4%. These numbers are in "constant currency". That means the company counts growth as if the dollar, the rupee and the euro had not moved at all, so only real business growth shows up.

Before and after panels: Cognizant expected 4% to 6.5% growth at the start of 2026, now 4% to 4.4% — The top end of the forecast has come down twice this year.

Why the cut? Chief executive Ravi Kumar said, as quoted by Mint, that clients are pulling back. In his words, the company is "seeing the macro uncertainty weigh more on discretionary spending in the fourth quarter", especially among healthcare and consumer-facing clients.

Discretionary spending means spending a client can delay. Think of a family in a tight month. It still pays school fees and the electricity bill. But the new sofa and the weekend trip wait. Companies do the same with tech. Keeping old systems running is the school fee. Fresh, new projects are the sofa.

Kumar also told reporters that oil prices, inflation and interest rates are all up this year. He said AI could help growth, but for that clients need to spend on new projects, and that has not happened the way it should have.

Fewer new orders on the table

There is another warning sign. Bookings means the value of new contracts a company signs. You can think of it as orders in hand at a samosa stall for next week's wedding. In July to September, Cognizant's bookings were 7% lower than a year ago. Over the last twelve months, bookings still rose 4% to $28.7 billion.

Business Standard also noted that Infosys trimmed its guidance earlier, for similar reasons. So this is not one company's problem. It is a mood across the IT services industry.

One part of Cognizant is doing well. Work for banks and other financial services clients grew 11.4% in the quarter. Kumar said this part, about 40% of the business, is "in good shape", and that wider spending could return in 2027 "if everything falls in place".

What does this mean for hiring?

Now the part that matters most for young readers. So far, Cognizant is still adding people, but slowly. It added 3,200 people between July and September, and 10,100 over the full year since September 2025.

Counter rising to 3,59,900 people, Cognizant's staff on 30 September 2026, with three bars for September 2025, June 2026 and September 2026 — Staff numbers are still rising, but by small steps.

For freshers, the company says it has already hired 20,000 engineering graduates, with 1,000 of them in the US. It also plans to hire 1,500 college graduates in the US as it builds a local team there.

In India, the company's own release describes a new training plan called Talent Accelerator. It started with 489 newly hired graduates from 58 business schools in 37 Indian cities. Their two-week training runs at company centres in Chennai, Bengaluru, Hyderabad and Pune.

Another number to watch is attrition. This is the share of staff who leave in a year. Picture a cricket academy where 12 or 13 of every 100 players move to other teams each season. Cognizant's attrition was 12.6% at the end of September, down from 13% in June. When fewer people leave, a company needs to fill fewer empty seats.

How to read the signal

A forecast cut does not mean layoffs, and the company has not said so. Still, this is a signal, like dark clouds before a match. When clients delay new projects, there is less new work for new people to do.

The company also says its business is moving toward AI. Kumar said "The pivot is switching from productivity to growth imperatives using AI". In simple words, clients first used AI to do old work faster and cheaper. Now some want AI to build new things. This is the kind of work the company is betting on.

For a closer look, this recording of the company's results call covers the quarter, the forecast and the outlook.

Watch on YouTube

And this video from Cognizant's 2025 investor day shows how the company explains its plans for the AI era.

Watch on YouTube

The short version

Cognizant grew faster than its Indian rivals, but now expects 2026 to end weaker than it hoped. Clients are saving their "nice to have" money. Hiring is still going on, but in small steps, and the company hopes wider spending returns in 2027.

As it was first published

Cognizant lowers its 2026 growth forecast again as clients go slow on new tech work