North Carolina Cancels $2 Million in Tax Incentives for Cognizant Technology Solutions
North Carolina Cancels $2 Million in Tax Incentives for Tech Company Over Job Creation Failure
North Carolina has canceled over $2 million in tax incentives for one of the largest information and technology companies in the country, Cognizant Technology Solutions, after it failed to meet its promise of creating 300 jobs in Charlotte.
The state’s Economic Investment Committee voted to cancel the Job Development Investment Grants for Cognizant after the company cited “economic uncertainty and decreased demand” as reasons for not meeting its job creation goals. It was not immediately clear how many jobs had actually been created.
In a letter to the committee last month, Cognizant stated that it is re-evaluating its real estate needs, including plans to close its Charlotte delivery center located in the University City area. The company currently has more than 1,900 employees based in North Carolina.
“We remain committed to our presence in Charlotte, but as we adjust our ways of working and embrace our new model, more work will be delivered directly from client sites and/or through remote work,” said Felix Weitzman, Cognizant’s chief human resource operation officer.
In 2018, Cognizant had pledged to add 300 jobs in Charlotte with the help of a state grant for just over $2 million spread over 12 years. The company was required to meet its job hiring goals in order to receive the grant. Jobs included IT application developers and business consultants with average salaries at $68,317.
David Rhoades, spokesman for the North Carolina Department of Commerce, clarified that no payment had ever been made to Cognizant as the company had not met the performance requirements for reimbursement.
Cognizant, a Fortune 500 company based in New Jersey, specializes in providing tech and consulting services. In 2020, the company acquired Bright Wolf, a company founded by alumni from N.C. State University and UNC Chapel Hill’s computer science departments.
The cancellation of the tax incentives serves as a reminder of the importance of companies fulfilling their promises in exchange for public funds. The state’s decision to hold Cognizant accountable for its job creation goals highlights the need for transparency and accountability in economic development initiatives.