Infosys to skive overseas staff to eliminate costs

By Tuesday, August 27, 2013 0 , Permalink 0

Many Indian IT companies are planning to reduce their overseas staff because of growing US immigration challenges and are looking to hire more and more local Americans resources.

On the same track is one of India’s biggest software and outsourcing giants – Infosys, which is also planning to curtail its overseas staff strength to about 20 per cent from present 25 to reduce its costs and boost its profitability margins.

N R Narayana Murthy, Chairman Infosys, with his son Rohan Murty, Vice President, are spearheading the efforts and have spent the last fortnight in the US attending meetings and addressing overseas employees. According to our sources within the company, the decision to curtail overseas staff does not only cover US but also company’s other overseas branches. Job culling will be accompanied increased focus on support functions as well as shifting of work to offshore locations

S.D. Shibulal, CEO Infosys, said at a US conference hosted by investment firm Oppenheimer that the company has come up with a combination of options like more offshore work, higher local recruitment, local development centers and same time-zone development centers. The company has also initiated pilots focused on higher offshore work in a bid to check how everything works out.

Infosys hasn’t officially commented on its overseas job cut stand. The company’s onshore efforts registered a 5.8 per cent rise from 77,109 personnel in quarter ending March to 81,609 in quarter ending June. Higher onsite billing will definitely lead to higher costs for the company and that is what the company is targeting to reduce.

Analysts are of the opinion that Murthy is on the right track and the culling of overseas flab would not only make the overseas operations more efficient but, could even lead to a 150-200 percent point boost in profitability margins.