Layoffs have become the byword today. Even an employee-friendly company like Infosys has laid off people. What processes does Infosys follow while implementing such harsh decisions?
No, actually, Infosys has not laid off people. Please!
What happens in a layoff is that the number of employees decreases. Actually, the number of employees in Infosys has increased!
We have let go 600 employees for lack of performance. Out of the 2,100 employees who belong to the lowest rung of performance in the company, 850 left on their own because they didn't see much future for themselves in the company.
650 employees have been put on the PIP -- Personal Improvement Program -- that is, we have given them a chance to improve.
Six hundred people who did not perform well and at the same time did not demonstrate an attitude towards self-improvement -- they come late, they do not work hard, etc -- we said there is no place for such employees in the company.
This has been going on for a long time. The only difference is that in good times this did not become an issue as they would go to other companies and get even better salaries. Now as those poor people are not able to get alternative employment, this has become an issue. Nothing new has happened, let me assure you.
In fact Infosys did something extraordinary. We said, instead of layoffs, we will take lower bonuses, lower variable pay this year and make sure that everyone who is worthy of a job is continued in the company.
For example, at the board level there is only 58 per cent bonus, at the next level they had 65 per cent, then 70 per cent and at the next 3-4 levels they had something like 84 per cent variable pay.
And in bringing about the reduction in variable pay, we ensured that the senior people suffered more than the juniors so that there is a sense of fairness and equity because we said we have to ensure that people who use their disposable income for very important activities -- like buying a house or children's education -- should suffer less that those who have much larger disposable incomes.
Image: Infosys founders (Left to right): Nandan Nilekani, S Gopalakrishnan, N R Narayana Murthy, K Dinesh, N S Raghavan and S D Shibulal. | Photograph, courtesy: Infosys Technologies
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