Meltdown forces Infosys to freeze wages, hiring (Lead)April 15th, 2009 - 8:02 pm ICT by IANS
Bangalore, April 15 (IANS) The impact of global recession has forced Infosys Technologies, India’s second largest IT bellwether, to freeze wage hike and fresh hiring in new fiscal 2009-10, a senior official said Wednesday.
“Employees will not get salary hike or promotions this fiscal. At the same time, there will be no cut,” Infosys board member T.V. Mohandas Pai told reporters here on the margins of a news conference at the company’s campus.
In fact, Pai added, the board members have taken a “steep cut of 58 percent in variable pay, which accounts for 50 percent of their total compensation”.
Infosys chief financial officer V. Balakrishnan said wage freeze and cut in variable pay would have a positive impact of 4.5-5 percent on the operating margin and improve the bottomline.
On the hiring front, the global software major will not make any fresh offers this fiscal, but honour the appointment letters given in the last fiscal to about 18,000 people, including 16,000 freshers and 2,000 laterals. About 1,000 laterals are being hired overseas.
“We are not going to recruit anyone this year in view of the uncertainty. We will, however, absorb all the 18,000 people to whom offer letters were given last time despite staggering their joining dates over the fiscal,” Pai said.
During fiscal 2009, the company and its subsidiaries hired 28,231 employees but lost 14,568 including 1,500 retrenchments, which took the total staff strength to about 104,850.
In spite of more number of employees leaving than being hired, attrition rate marginally declined to 11.1 percent from 13.4 percent in the previous fiscal.
Pai, who is also head of the company’s human resources department (HRD) and education and research, said the impact of slowdown would force the Indian IT industry to limit hiring this fiscal to about 100,000, while about 200,000 would quit.
Due to higher retention, the attrition rate in the industry is projected to decline to eight percent in fiscal 2010 from 15 percent this year.
“The Indian IT industry employees about 2.2 million people. An estimated 200,000 people will be quitting. About 50,000 will be involuntary and the rest voluntary for various reasons,” Pai said.
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