Visakhapatnam: Cognizant Technology Solutions will invest Rs 1,583 crore to set up a new campus in Visakhapatnam, Andhra Pradesh, as part of its broader strategy to expand operations in tier-2 cities and cut down real estate costs in metro areas. The facility is expected to generate around 8,000 jobs and begin commercial operations by March 2029, according to a statement from the Andhra Pradesh government.
Tier-2 Expansion Strategy Gains Momentum
This investment follows a similar announcement by Tata Consultancy Services (TCS), which committed Rs 1,370 crore to establish a new campus in Visakhapatnam, aiming to create 12,000 jobs. The back-to-back announcements from major IT firms indicate a growing preference for tier-2 cities, where companies see opportunities for cost savings and access to untapped talent pools.
Cognizant’s decision aligns with its ongoing real estate optimisation strategy. CEO Ravi Kumar S has previously stated that the company plans to vacate approximately 11 million square feet of office space, mainly in India’s top cities, in favour of expanding in emerging locations like Visakhapatnam. This shift is being driven by a mix of factors, including lower operational costs and the flexibility offered by hybrid work models.
Cost Pressures Shape Real Estate and Hiring Decisions
The move also reflects wider trends in the IT sector, where companies are adjusting to macroeconomic uncertainties by moderating wage growth and monetising real estate assets. India’s IT services industry, currently valued at around USD 283 billion, has been navigating fluctuating demand while investing in emerging technologies such as artificial intelligence to drive long-term growth.
Despite the cautious business environment, Cognizant has revised its 2025 revenue guidance upward, now projecting annual revenue between USD 20.5 billion and USD 21.0 billion. The company exceeded first-quarter expectations, supported by increased demand for AI-enabled IT services.
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