Asia News Jun 02

Infosys to streamline management

To facilitate quicker decision making, Indian software major wants to reduce five-layered structure to two

by KS Kumar
Infosys to streamline management
The Infosys Technologies campus in Bangalore. Photo: AFP

Indian software major Infosys is looking to streamline its top management structure in order to avoid the overlapping of roles. The Bangalore-based company wants to reduce its five-layered structure to two, in order to facilitate quicker decision making.

The company is assessing the roles of delivery managers, industry principals, assistant vice presidents, vice presidents and the senior vice president to make it a flatter organization. Those in the sales, delivery, business process outsourcing and support services will be affected, Times of India reported. Infosys has ruled out retrenchment or specific percentage-driven performance exits, but has not ruled out “involuntary attrition,” the daily added.

There are nearly 13,000 employees working at these levels in the organization and nearly 10-15% are bound to be impacted.

SEC filing

Earlier, in a Securities and Exchange Commission filing in the US, the company said the pandemic poses a major risk as key clients in the US and Europe have been impacted by the Covid-19 pandemic and may cut costs. This could impact its cash flow and profits.

The company expects its existing projects to be delayed or suspended if the pandemic is not brought under control. For the first time the software giant has withdrawn its growth guidance, citing uncertainties in clients’ businesses.

CEO salary

Interestingly, CEO Salil Parekh’s compensation grew 27% to US$ 6.1 million in 2019-20, compared with $4.8 million the previous year. Parekh was granted a significantly higher number of performance-based restricted stock units compared with the previous fiscal and saw a more than 50% rise in value of granted RSUs. His fixed salary has been marginally reduced.

However, Infosys chairman Nandan Nilekani has chosen not to receive any remuneration for his services. CEO UB Pravin Rao’s compensation rose 29% to $2.2 million and CFO Nilanjan Roy received about $1.5 million.

Overall, the revenue per employee has marginally risen from $54,034 in FY19 to $54,142 in FY20. The company has spent $945 million hiring sub-contractors and other temporary staff.

Visa issue

Infosys also raised concern over the increase in in the number of visa and visa renewal application rejections, predominantly in the US. The company pointed out that this has led to project delays and cost overruns. There is an air or uncertainty over key employees being present in the country during the execution of the project.

The company added that it has seen similar actions in Australia and in the governments of many other countries. These anticipated restrictions would mean additional costs for maintaining and renewing existing visas, thus resulting in additional expenses for client delivery, Infosys said.