Infosys to cut costs by reducing senior professionals onsite

infosys-careersInfosys executive chairman NR Narayana Murthy said the software major will focus on reducing costs by trimming the number of senior employees and subcontractors it employs at on-site locations as he reassured investors the company is well positioned to regain its lost market share.

Murthy, who returned to Infosys as the executive chairman in June, told analysts from British multinational bank Barclays that employee motivation in Infosys has improved and recent senior-level exits would only have limited impact on the company’s performance.

He said Infosys has a full bench of senior managers to fill in any gaps and secondly, most of the churn has been of the managers who were either not comfortable with the changed circumstance or for which the company thought that there was limited value addition. “There has been only a few exits of people who have left due to higher ambitions,” the report quoted him saying.

After Murthy’s return, six Infosys executives have left the company. While global sales head Basab Pradhan quit in July, global manufacturing head Ashok Vemuri quit in August. Stephen Pratt, head of Infosys utilities and resources vertical for North America, quit earlier this month.

The report said Murthy, 68, admitted that “Infosys‘ billing rate premium over peers is unlikely to return as customers are now more focused on near-term cash flows rather than total cost of ownership”.

According to Barclays, Murthy indicated that cost optimisation could happen more quickly than the earlier guided period of 21 months with some early results visible by the March 2014 quarter. He said Infosys would not shy away from replacing bottom-ranking sales people with smarter local hires.

“It (management) also said Infosys’ sales effectiveness needs to improve through a greater focus on performance management, training, proposal quality, and better internal systems and processes,” the report said,

The Barclays report said Murthy admitted that Infosys needs to both improve its own systems and processes, as per the management, and in some cases improve the quality of its sales force.

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