IT layoffs: Infosys co-founder Narayana Murthy calls for salary cuts by management to protect jobs

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Updated: June 1, 2017 1:48:34 PM

Infosys co-founder NR Narayana Murthy also said that it is unfair to send employees home without giving them a chance to re-skill.

Infosys co-founder NR Narayana Murthy also said that it is unfair to send employees home without giving them a chance to re-skill.

Amid reports of layoffs in information technology (IT) sector, Infosys co-founder NR Narayana Murthy told ETNow in an interview that there is no need to become extremely anxious and it is possible for senior management to make minor adjustments through salary cuts and protect the job of youngsters. He also added that it is unfair to send employees home without giving them a chance to re-skill. While talking about the layoff controversy, he said that this is not the first time that business is going through troughs and like the past, a solution to this problem can also be achieved.

Many software companies like Infosys, Wipro and Cognizant are reportedly asking their employees to leave to control costs amid a challenging business environment. According to reports, Infosys had announced that it could hand out pink slips to hundreds of mid and senior-level employees as it carries out bi-annual performance review. The US-based Cognizant is said to have rolled out a voluntary separation programme for directors, associate VPs and senior VPs, offering them 6-9 months of salary. Wipro, too, is reportedly asked about 600 employees to leave as part of its annual “performance appraisal”.

Murthy said during the ETNow interview that senior managers should identify new areas of opportunity for the young employees/engineers and mount programmes to training them in new skills and technologies. He said with this training programmes, the employees should be asked to perform and add value to the company.

While elaborating on the current business environment, Murthy said the market is very tough but a solution can be achieved. He gave an example of how Infosys dealt with a similar problem in 2001 when the market shrank. “When the market became very tough and shrank in 2001, we all- senior mangements sat together and decided to make some sacrifices to ensure job protection of youngsters. That time we had offered jobs to 1500 engineers. Several companies were postponing the joining dates. We decided not to do that and demonstrate our commitment to youngsters by the senior people taking some salary cuts based on the disposable income. We did that and welcomed 1500 engineers,” he said.

On the intentions of business leaders in the current business environment and intentions of senior management, Murthy said that he can’t comment much as he is not in touch with the industry. He, however, said that there are a lot of smart leaders in the industry and they are all well intention people and they can find solutions to problems like layoffs.

According to executive search firm Head Hunters India, the job cuts in IT sector will be between 1.75 lakh and 2 lakh annually for next three years due to under-preparedness in adapting to newer technologies. A report submitted by McKinsey & Company at the Nasscom India Leadership Forum said, nearly half of the workforce in the IT services firms will be “irrelevant” over the next 3-4 years.

IT companies have been one of the largest recruiters in the country. However, they have warned that increasing automation of processes would lead to a reduction in hiring in coming years.

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