Cognizant ropes in JLL for sale of its world's largest facility: sources

Jones Lang LaSalle Incorporated

30/11/2023 13:34

By Sai Ishwarbharath B
       BENGALURU, Nov 30 (Reuters) - 
    Software services giant Cognizant  CTSH.O  has appointed
real estate management firm JLL  JLL.N  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)
 ((saiishwarbharath.b@thomsonreuters.com;))