What Vishal Sikka Said About Reports Of Layoffs At Infosys

Infosys CEO Vishal Sikka on Friday told analysts that the Bengaluru-based IT company is not laying off employees. His comments come at a time when there has been intense speculation about pink slips at Infosys, following Royal Bank of Scotland's decision to cancel a project for which the IT major was a key technology partner.

"If you are an employee, involuntary attrition is somehow a code name for a layoff or something. We are not doing any layoffs," Dr Sikka said.

Attrition continues to be an area of "great focus" for the company, he said, adding that Infosys has developed an elaborate mechanism to identify high performers.

"Every Infoscian is valuable, but in particular, there is a group of high performers that we want to focus on and I expect that attrition in higher performers would continue to decrease. We are doing a lot of fundamentally new kind of things, so that our employees continue to be in high demand," Dr Sikka said.

India's second largest IT outsourcer is struggling with rising employee churn, though attrition in 'high performers' category declined by 200 basis points sequentially in the June quarter. Overall attrition rose to an annualized 21 per cent versus 17.3 per cent. (Read)

In July, Infosys introduced its employee stock options or ESOP programme after a gap of 13 years, in an indication that the company was serious about tackling the issue quickly.

A lot of questions in Friday's analyst meet were also about the demand environment in the aftermath of Britain's decision to leave the European Union following a referendum in June.

Infosys said it is seeing some 'softness' in clients after Brexit. The company will be in a better position by October to evaluate the impact of this on its earnings outlook for the current fiscal year ending March 31, 2017, Chief Financial Officer Ranganath D. Mavinakere said.

"We want to give a more accurate picture on guidance after we execute Q2," he said, adding that he was confident growth in the second quarter would be better than the previous three months.

Infosys shares have underperformed the broader markets since July, when the company cut its annual revenue guidance. (Read)

(With inputs from Reuters)