Nasdaq-listed Cognizant is reworking the economics of IT services by embedding artificial intelligence (AI) directly into pricing and workforce metrics, as the company moves away from traditional effort-based models.
Chief Executive Ravi Kumar S said the company has introduced AI-infused rate cards, where pricing now blends human effort with what it terms ‘digital labour’, marking a shift in how services are billed to clients.
Alongside pricing changes, the company has rolled out an ‘AI fluency meter’ across its workforce, assigning employees a composite score based on their usage of AI tools, training progress, certifications, and real-world AI-led project contributions.
“We now have AI-infused rate cards with human labor and digital labor in different categories, one where AI is verifying what humans do and the other where humans are verifying what AI does, and all the way to autonomous digital labor,” Kumar said during the post-earnings interaction.
The new rate card structure effectively positions AI as a billable component within client engagements, rather than just a productivity layer sitting behind the scenes. It also reflects a broader industry shift as enterprises push vendors to pass on productivity gains driven by automation.
Kumar framed the move as part of a deeper transition in how IT services are sold.
“How do we transition from selling effort to selling outcomes? How do we transition from bill hours to more fixed price, more managed service, more transaction-based, more outcome-based?” he said.
Tracking ‘AI fluency’ across workforce
Internally, Cognizant is moving to measure productivity through AI-led output rather than traditional utilisation metrics.
“We now have something called the AI fluency meter… Every associate in the company has it,” Kumar said, adding that the system assigns a composite score based on “the amount of tokens you use, the trainings you’ve done, the certifications you’ve done, the innovation use cases you’ve established on AI.”
The company said employees can use these scores to identify gaps and improve their capabilities, creating a standardised benchmark for AI readiness across the organisation.
From human effort to hybrid labour
The twin changes in pricing and performance tracking are part of a broader reset in Cognizant’s operating model, as it shifts towards a blend of human and digital labour.
“You have to look at the capability pyramid as no longer human effort… you have digital labor and human labor, you have agents and humans working together,” Kumar said.
This shift is also driving changes in hiring and training, with the company focusing on building AI-native capabilities even as it reshapes existing roles.
Industry at an inflection point
Cognizant’s move shows a wider change underway in the IT services industry, where generative AI is compressing traditional revenue models even as it opens up new areas of demand.
By embedding AI into both pricing and workforce metrics, the company is signalling that future growth will depend less on scaling headcount and more on delivering measurable outcomes powered by automation.