Bengaluru: Infosys Ltd’s decision to defer its plan of adding 10,000 local employees to its US workforce by May 2019 underscores analysts’ observations on the incumbent chief executive Salil Parekh’s conservative approach. Analysts say Parekh believes in setting more realistic targets, unlike his predecessor Vishal Sikka.
Sikka initially set the plan to add 10,000 local employees in the US in two years, starting May 2017. Now, Infosys suggests it will take more time to increase this number.
“We announced 10,000 local US hires, of which in the last 12 months we have already achieved 4,000. We have hired 800 college graduates. We have a plan to hire 1,000 graduates per year in the coming fiscal and the fiscal after that," Parekh said at a Morgan Stanley-sponsored analyst event in Mumbai on Wednesday. He, however, did not share further details.
But, according to two Infosys executives, the CEO’s suggestion indicates the IT firm will realistically not meet that number before April 2020.
An Infosys spokesperson referred to the firm’s recent post-earnings press conference in April, wherein its chief operating officer U.B. Pravin Rao had indicated that the company would meet its US hiring target only by April 2020.
Analysts also believe that recent developments, including the target of 7-9% dollar revenue growth in the current fiscal year, show that the company is recovering from the turbulence of August 2017, when Sikka and former chairman R. Seshasayee were forced to quit, and co-founder Nandan Nilekani was brought in to save the day.
Interestingly, the US hiring decision was not the first time that Infosys re-evaluated its near- and long-term goals following Sikka’s departure. The company had also cut down on its $20 billion revenue target by 2020, as it had put additional pressure on the company’s top executives to meet aggressive near-term goals. It had also led to the exits of at least a dozen senior executives, who were reporting to Sikka.
At least one foreign analyst said that Infosys, under the new CEO, is setting more realistic targets. “We come away from our meeting with leading industry participants a bit more confident that Infy can meet targets for FY19. Moreover, we did not think that the previous Infy management set realistic targets, but we believe new management has set achievable FY19 targets," wrote Keith Bachman, an analyst with BMO Capital Markets, in a note dated 23 May.