Infosys denies reports of job cuts

Indian software giant denies plans to fire 5,000 employees, amid earlier reports that it already begun to cut employees with low performance levels, up to 3 to 4 percent of its workforce.
Written by Ellyne Phneah, Contributor

Infosys has begun sacking up to 5,000 employees with low performance levels, a practice it adopted at the peak of the global economic crisis in 2009 and 2009.

According to The Times of India on Friday, citing sources familiar with the matter, the lack of tolerance for poor performance is due to pressures faced by the Indian software company to curb costs while balancing a more aggressive sales strategy.

The retrenchment plan was crafted by the company's co-founder NR Narayana Murthy to enable underperformers to come up to scratch. Instead of giving these underperforming staff up to six months of retraining, Infosys is asking about 3 to 4 percent of its workforce of 150,000 employees to leave immediately.

However, Infosys told Reuters there were no mass lay-offs planned by the company and the number of underperformers leaving could potentially be "significantly lower" than the 5,000 mentioned by the Indian publication.

"We have a robust performance management system that includes structured appraisals and performance feedback," the company said in a statement. "This is done regularly and is not a one-time event."

In 2009, Infosys had gotten rid of 2,000 employees at the bottom of the performance ladder, according to The Times of India report.

The reports are the latest is the latest in a series of "employee-unfriendly" management decisions. In April, Infosys had previously frozen salary hikes, citing bad market conditions and insufficient visibility into short-term growth, a separate report on The Economic Times, noted. However, the company relented eventually and announced increments after its rivals revised salaries for staff.

Last October, Infosys reported a revenue of US$1.8 billion on Friday for its quarter ending 30 September, up 2.9 percent year-on-year.

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