BENGALURU: In a drastic move to cut costs to deal with the double whammy of low margins and slow growth, IT services major Infosys plans to fire 10,000 employees. This will impact workforce across all levels in the programming and engineering divisions, sources privy to the development told TNIE.
According to analysts tracking the company, H-1B visa denials for recruits from India and high costs of hiring local employees in the US have also led to the situation.
Infosys has hired over 5,000 locals in the US in the past year to strengthen its digital and consulting services for global companies.
When contacted, the company claimed there have been no mass layoffs. “As a high-performance organisation, involuntary attrition is integral to normal course of business and this should not be interpreted as any mass trimming across any level in particular,” it said in an email response.
Involuntary attrition is the jargon for lay-off.
Infosys wants to trim 5% of its 200,000-strong workforce, which works out to 10,000. More than half of the pink slips would be issued to junior employees.
Upon completion of training, they will have to reappear for tests and the best performers may be retained. On the other hand, under-performing mid- and senior-level executives will be summarily sent home, sources said.
Analysts say the trend of firing mid- and senior-level executives is picking up in the IT sector. “Compared to the early half of the decade, growth across the IT services sector in India has slowed down. Layoffs in the order of 10-15% are now considered a routine affair. With global firms like Cognizant admitting in public their plans of involuntary attrition, Indian IT service companies will also follow suit without shying away from revealing their layoff numbers,” said Kris Laxmikanth, CEO, Head Hunters India.