Infosys not planning major layoffs, but salary hikes to be deferred, says COO Rao

Infosys COO U.B. Pravin Rao says in letter that salary hikes will be pushed to July as IT firms struggles to cope with visa-related issues in key markets like the US

Infosys’s decision of pushing salary hikes to July comes at a time when there are reports of layoffs across the IT industry. Photo: Mint
Infosys’s decision of pushing salary hikes to July comes at a time when there are reports of layoffs across the IT industry. Photo: Mint

New Delhi: Infosys Ltd’s chief operating officer U.B. Pravin Rao has assured employees that the management isn’t planning any layoffs, and only under-performers may be asked to leave.

“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,” Rao wrote in an email to all employees on Wednesday.

The email, which was seen by Mint, was sent amid concerns over potential layoffs in the information technology (IT) industry amid slower growth. Seven of the biggest IT forms in India, including Infosys, plan to ask at least a total of 56,000 employees to leave this year, Mint reported on Friday.

“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 commoditized. In addition, geo-political events are further disrupting the traditional business model,” Rao wrote.

He sought the support of employees to help the management tide over the difficult times.

“We are working hard to get our momentum back, and I’m confident that with your support, this will be possible sooner than later.”

Infosys’s senior management is now trying to address growing concerns among employees, many of whom are getting jumpy that in these challenging times, some of them may be asked to leave the firm. Infosys has already placed more than 3,000 of its 30,000 senior employees (Rank of JL6 and above) in the category of employees needing improvement. Additionally, Infosys also put on notice another 3,000 junior employees, making many believe that the company could ask 6,000 employees to leave the firm in the current year.

For now, Infosys declines to comment on how many employees have been asked to leave in the current quarter.

“Our performance management process provides for a bi-annual assessment of performance,” a spokeswoman for Infosys said. “We do this every year and the numbers could vary every performance cycle”

In this financial year, the nearly 170,000 junior employees of Infosys will get salaries that reflect the annual hike awarded to them from 1 July, instead of April. Rao did not give a reason for the delay.

The 30,000 senior executives would have to wait longer for their annual hikes. Rao said that the company will perform the compensation review in subsequent quarters.

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