Tariff Pressure Slows IT Spending in Life Sciences: Cognizant’s Surya Gummadi Highlights Caution

During the 2025 Bank of America Securities Global Technology Conference, Surya Gummadi, President of the Americas at Cognizant, addressed how various macro forces—including tariffs are reshaping demand in the IT services industry, particularly within the life sciences segment.

Surya Gummadi pointed out that clients across industries such as life sciences, healthcare, manufacturing, and retail are increasingly cautious with IT investment due to mounting economic pressures, including ongoing U.S. tariff policies initiated under former President Trump. Concurrently, the advent of Generative AI (GenAI) has injected additional uncertainty into business planning, even as it opens new avenues for innovation and transformed service models such as outcome-based pricing.

Clients are reportedly consolidating service providers, seeking integrated, end-to-end solutions, and moving from traditional billing structures toward pricing models tied to measurable outcomes. These shifts are seen as direct responses to heightened cost optimization imperatives and the disruptive potential of AI.

“We have noticed caution in the life sciences segment,” Gummadi confirmed. Tariffs have unsettled the supply chain and economic confidence for clients in pharmaceuticals, medical devices, and biotech. This has triggered a delay or slowdown in digitization and IT modernization projects, as companies weigh the cost implications and timing in the face of unpredictable trade interventions.

Despite such pressures, Cognizant achieved a notable performance increase in 2024. The firm closed 29 large deals up from 17 in 2023 demonstrating an improved sales pipeline. Among these, a key highlight is the extension of a $1 billion healthcare contract, signifying sustained trust in Cognizant’s capabilities. The overall trailing 12-month bookings reached $27.1 billion, reinforcing optimism in inflows despite macro challenges

Gummadi illustrated how the layered impact of tariffs, rising interest rates, and AI-driven disruption differs from previous cycles. The current business environment is typified by dynamic risk variables and intensified stakeholder demand for agile, performance-based solutions—reflecting a fundamental shift in client expectations.

Generative AI, while a catalyst for operational innovation, is reshaping everything from pricing models to large-scale digital transformation priorities—contributing to a transitory slowdown in several enterprise IT segments.

In response, Cognizant is refining its offerings to align with demand trends-prioritizing end-to-end service frameworks, bolstering outcome-linked pricing strategies, and capitalizing on GenAI deployment opportunities. The firm maintains an adaptable sales strategy to accommodate short- and long-term changes in client IT agendas.

Even amid cautious spend, the rising deal velocity and large contract renewals signal that strategic digital transformations remain central to enterprise growth agendas.

(Input from various sources)

(Rehash/Sakshi Thakar/MSM)