Belcan growth uncertain as US looks to cut federal spend

Cognizant expects to earn $20.8 bn in 2025, with Belcan likely to drive most of organic growth for the company

- Jas Bardia

Cognizant Technology Solutions Corp.'s second-largest acquisition is facing an uncertain road, as a big chunk of its work comes from the US federal contracts, many of which are now under scrutiny. Belcan, which Cognizant acquired for $1.3 billion in June 2024, gets over three-fourths of business from commercial aerospace, defense and space, while 40% comes from US federal contracts.

With the US Department of Government Efficiency led by Elon Musk clamping down on government spending, sectors contributing to growth could suffer. "The new administration is committed to cutting federal spending," said Peter Bendor-Samuel, founder and CEO of Everest Group. "The commitment to significantly reduce government spending will undoubtedly create a significant headwind for all government contractors including ER&D (engineering research and development (ER&D))," he said.