Unfazed by the recent upheavals at the board, Infosys will
continue to hire about 6,000 engineers annually over next 1-2 years, same as
last fiscal, according to a top company official.
The country's second largest software services firm has also
ramped up its hiring process in the US and European markets as it looks to tap
opportunities and tide over visa- related issues.
"we continue to recruit. This year that just concluded
we had a net addition of 6,000 and we expect similar kind of additions over the
next 1 or 2 years, depending on the kind of growth you see in the market,"
Infosys interim-CEO and MD U B Pravin Rao said at an investor meet last week.
The Bengaluru-based firm has been in the eye of a storm over
the past few months, with the founders and former board members clashing over
alleged corporate governance lapses and irregularities in Infosys' USD
200-million Panaya acquisition.
The spat, which often spilled over into the public domain,
led to the then CEO Vishal Sikka as well as former Chairman R Seshasayee and
three other board members quitting.
Co-founder Nandan Nilekani was named the non-executive
Chairman in a move that was seen as the company bowing to the demands of
co-founders and large institutional investors.
After Sikka's exit, Rao assumed the additional charge as
interim CEO and MD.
Rao said over one million graduates pass out each year,
which may look like a large number but only 20-30 per cent of that is quality
talent.
"(This is the number that) we and our competitors focus
on...It is a question of doing more with less, how can one be more
productive," he said while answering a query on whether increasing
automation would result in job losses.
At the end of June 2017, Infosys had a total of 1,98,553
employees on its payroll. The company does not provide country-specific
headcount.
During the said quarter, Infosys hired 8,645 people at a
gross level but its overall headcount was lower by 1,811 people on a net level
(which factors in attrition numbers).
Earlier this year,
there were reports of layoffs across the IT sector. With Infosys stating that
it was stepping up hiring in international markets like the US, there were
concerns that it could impact the company's recruitment plans in India.
Infosys had, at that time, stated it planned to hire 20,000
people (gross) this year.
Infosys has stated that it is in favour of a healthy mix of
local and global personnel, even though hiring locals in overseas markets often
pushes up operational costs for IT outsourcing companies.
During the investor meeting, Rao said Infosys is also looking
at increasing localisation of its workforce and is recruiting about 10,000
people in the next few years and setting up development and innovation hubs in
the US.
”we have already started the process and we will only
accelerate," he added.
The US, which is the largest market for Infosys, much like
its peers, accounted for over 61 per cent of its topline in June 2017 quarter.
Europe accounted for 22.4 per cent of the company's USD 2.65 billion (Rs 17,078
crore) revenue during April-June 2017 quarter.
To a query on the company's India business, Rao said Infosys
continues to be selective about projects in the country.
"we continue to be very cautious about India...there
are pricing challenges, sometimes getting payment is a challenge," he said.
Infosys retains
clients, paints bleak demand environment
Infosys’ interim CEO said clients had been comforted after
reassurances that the company’s strategy would not change after former CEO
Vishal Sikka resigned, but said that despite expectations demand had not
returned in the IT firm’s financial services business.
The Bengaluru-headquartered company was facing the prospect
of clients reconsidering their spending with the company after Sikka’s exit
from the company. ET had reported that the company’s sales team was paralysed
for the wee k after his resignation.
“Many clients said they were sad to see Vishal leave but
they have said that these relationships last beyond individuals. In some cases,
our relationships go back decades. Once we gave them assurances about the
continuity of strategy, they were comforted,” UB Pravin Rao, interim CEO at the
company, said.
Rao added that the company had not seen anything unusual in
the two-three weeks since Sikka’s exit and the return of co-founder Nandan
Nilekani as non-executive chairman.
“We have three weeks left to the end of the quarter and we
are focused on execution,” Rao said.
The company had expected demand from banking and financial
services clients, which contribute the biggest chunk of its revenues, to begin
to grow. That has not happened.
“We have not seen changes from the start of the quarter. We
have not seen the demand pickup in financial services. Demand continues to
remain moderate,” Rao said.
He added that the company doesn’t expect energy companies to
show a pickup in spending and that retail, another large client segment,
remained volatile. Continued muted demand might require Infosys to rework its
full-year guidance. The company expects growth of 6.5-8.5% in constant
currency.
Rao said investors would have to wait until October, when a
promised strategy review will be disclosed, for more details on a range of
factors including a possible new guidance philosophy.
Rao said investors would have to wait until October, when a
promised strategy review will be disclosed, for more details on a range of factors
including a possible new guidance philosophy.
“Strategy is not static. It will evolve. We will have to
fine-tune some parts that may not be working but the overall direction of our
strategy remain,” Rao said.
But Infosys did say it would continue to defend its margins –
expected to be within a range of 23-25% -- despite investing in new businesses.
The company has five margin levers, CFO MD Ranganath said, and it maintains a
‘laser sharp’ focus on them.
“In the renew part of the business, we have to be
competitive and that means we have to look at our costs. All these cost
optimization measures were not at the cost of growth,” Ranganath said. He added
that the company’s investments had already been factored into its margin range.
