Forbes has recently published its Global 2000 companies list and placed Infosys at 891. Not only that as per Forbes, Infosys is among the companies that are hiring along with TCS and Wipro. Quite contrary to what Forbes has said, Infosys has actually fired 2100 employees for poor performance.
Some of these employees have been asked to go while some have left on their own. Prior to asking the employees to leave, they were put on a performance improvement course and those who showed no improvement were asked to leave while some others quit. Tolerance to poor performance is very low given the current economic scenario. (BusinessStandard)
Infosys employee strength is between 103,000 to 105000 and the fired employees constitute a mere 2% of the total workforce. As per Infosys’s CEO they fire close to 5% workforce every year. 2% is very less by global standards and is only expected from companies like Infosys whose main capital is their people. It is not even alarming to think if this is the trend.
What is alarming is the threats Indian IT foresee for the next few quarters. Many of the companies including Infosys and TCS projected a bleak outlook for the earnings season. Indian IT as per Economic Times might shed some 75000 jobs this year. That to me is a very significant number.
Indian IT was jolted by the 7000 crore Satyam scandal at the start of the year. Luckily for Indian IT, that did not affect very much. Even Satyam has turned up some cash and is close to generating profits. This is a good indication that the global outsourcing industry is intertwined and India is an important link in that. Indian IT also got lucky with Japan opening its gates to its software services market. Patni Computers got a recent contract from one of the Japanese companies.
In a previous blog post of 11 questions to outsourcing industry, there were several question to the industry and the affect of recession on the industry as a whole. One important question or rather an answer to the whole puzzle is the Indian domestic market itself. IBM is continuing to dominate the market with the Indian IT players lagging behind.
Indian IT services is estimated to be at $5bn. Infosys has less than a percent market share in India. It might do well to improve on that. So will the rest of the IT companies. So, When will Indian IT dial India? It is fine if there are some missed calls but the important thing is – it has to dial.