Infosys sought to pacify employees’ fears, amid reports of layoffs, and said there was no ‘planned layoff.’
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However, the company said there could be performance-based exits as in the past. “I would like to put to rest any speculation around planned layoffs. As has been the case in the past, we will primarily see some performance-based exits,” Infosys Chief Operating Officer Pravin Rao said in an email sent to the company’s staff.
Infosys also said the compensation revision for its India employees would be done in July. According to the email, Mr. Rao said employees who are in the JL5 band and below, the compensation review will be effective July 1, 2017. The senior employees may have to wait longer for their compensation revision.
The JL5 and lower bands consist of employees like software engineers, team leads, among others which constitute around 40% of the total employee strength.
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The email comes at a time when there are reports that IT services firms, like Infosys, Wipro, Cognizant and Tech Mahindra, are planning to reduce the headcount as growth is slowing . The adoption of new technologies, automation and reduction in growth in the banking and healthcare segments in the U.S. and geopolitical events are impacting the profitability of Indian IT companies.
“As you are aware, the last financial year was a challenging one; our Q4 results were below expectations, the industry is going through challenging times and our core services business continues to be commoditised,” Mr. Rao wrote.
Further, the company management also said it is looking at various opportunities to optimize cost. The company which had launched a few cost optimization measures had to discontinue a few initiatives based on the employee feedback.
“Earlier this quarter we had embarked on a few cost optimization measures. Based on feedback received from many of you, we have decided to reconsider and discontinue a few initiatives that were causing discomfort,” Mr. Rao said.