Infosys is likely to reduce its onsite operations. This will result into job cuts in India.
The strategy by India’s second-largest IT services exporter is to ensure cost efficiency in its operations. Infosys’ onsite cost accounts for 46 percent of total cost as of March 2013. ( Infosys employees net addition lowest comparing TCS and Wipro in Q1 )
The Infosys management is looking to cut costs in the strategic global sourcing (SGS) division. Infosys feels that the SGS group is overlapping with what the sales function does, ET Now reported.
Economic Times had earlier reported that Infosys under Chairman Murthy is centralizing decision making. The chairman’s office has to sign off on key decisions related to large technology contracts, such as pricing or the way a deal is structured that might expose Infosys to future risks.
Before Murthy’s return, Infosys CEO SD Shibulal was in the process of decentralizing decision-making, especially those related to negotiating and signing contracts.
The intention was to empower client-facing sales executives who are aware of moves by competitors and other considerations critical in negotiating and winning large outsourcing contracts. Under that model, a business unit head would be empowered to close large deals.
For Infosys, which gets the lion’s share of its over $7 billion revenues from enterprises in the US and Europe, this could mean longer decision cycles when it comes to large contract negotiations.
Meanwhile, media reported that Rohan Murthy, son of NR Narayana Murthy will be designated as vice president. He is currently the executive assistant and part of the chairman’s office. ( Why Infosys needs to look inside for major corrections )
Recently, Sudhir Chaturvedi, vice-president and North America head for financial services and senior vice-presidents Shaji Farooq and Balaji Yellavalli from the same vertical left Infosys.
Last week, Infosys elevated three senior executives to its executive council, to drive cost-rationalization and new global delivery model initiatives from the chairman’s office.