Apr 16, 2009

Infosys signals tough times ahead

According to this news report:

With companies keen on maximum utilisation of employees and low tolerance to poor performance in the backdrop of global economic turmoil, nearly 2,100 employees in software firm Infosys have faced the axe.

 the officials said the sacking was part of the annual routine, which usually formed 5% of the total number of employees but this time it was much lower.
Some of the employees had been “outplaced”, Kris said, which refers to the firm hiring the services of placement agencies to help the employees to get placements in other firms.
Infosys has a workforce of 1,05,000, including trainees.

And its results signals more tough times ahead:

Infosys Technologies has decided to freeze wage hikes and hiring for fiscal 2010 and maintained that it would honour all campus offers made last year.
“Employees will not get salary hike or promotions this fiscal. At the same time, there will be no salary cuts,” said Mr Mohandas Pai, head of HR and board member of Infosys.
Infosys has maintained the salary structure for the employees that includes a variable pay component which ranges from 15 per cent of the compensation package for junior employees to about 50 per cent of the compensation for the board members.
“The board members have taken a steep cut and received only 58 per cent of the variable pay for the year,” Mr Pai said. Senior employees got 65-75 per cent of the variable component for the year, while junior employees received about 85 per cent of the variable pay. Mr Pai said Infosys would add some 18,000 employees for the year ahead including 16,000 freshers for whom the offer letters have been issued last year. (The company made 20,000 campus offers and assumes an 80 per cent acceptance – hence 16,000 offers.) It would add 2,000 laterals including some 1,000 laterals overseas.
“We will absorb all the 18,000 people to whom offer letters were given (including lateral hires) last time despite staggering their joining dates over the fiscal,” Mr Pai said.

However I think there is more caution in these actions, and things are on the upswing at least in industries that address the Indian consumer. Smaller IT firms that target the domestic industry might grow much better as SMEs look at ramping up their IT systems