In a bid to mitigate the impact of the crisis caused by COVID-19, Infosys has temporarily suspended hiring, promotions and salary increments, calling it a 'no regret' move. The IT major, however, said it will honour the job offers that have been made so far in order to enhance the skill-sets.
"Infosys intends to not only nurture its vast pool of digital talent in a high-productivity environment, but also honour the job offers it has extended to the markets, in order to enhance the skill-sets it can bring to recovery-focused client environments," the Bengaluru-headquartered company said in a filing to exchanges.
With this, Infosys has joined the league of TCS and Wipro, who have promised to honour all job offers made in the last financial year.
The company said it will work to optimise its cost structure and operational rigor, anticipating a continued slowdown in the near term influenced by a broad-based global economic recession. "With some impact due to project deferrals and softening of discretionary spends, there will be some margin pressure in the near term," the company said in the regulatory filing.
As of 31 March, 2020, Infosys had 242,371 employees compared to 2,28,123 during the same period last year. Attrition rate for January-March period stood at 20.7 per cent against 20.4 per cent in the same period last fiscal.
Infosys, which has reported single digit top and bottom line growth, has suspended guidance on revenues and margins for FY21 due to business uncertainty arising from COVID-19 crisis. "Considering the business uncertainty emanating from COVID-19, the company is unable to provide guidance on revenues and margins for FY 21 at this stage. The company will provide guidance after visibility improves," it said in the regulatory filing.
For the fourth quarter ended March 31, 2020 (Q4FY20), Infosys reported a 6.10 per cent YoY increase in consolidated net profit at Rs 4,321 crore, while revenue rose 8 per cent YoY to Rs 23,267 crore.
For the full financial year 2019-20, the IT giant posted a 7.97 per cent YoY rise in its net profit at Rs 16,639 crore against total revenue of Rs 90,791 crore, up 9.8 per cent on yearly basis.
Commenting on earnings report, Infosys, CEO and MD, Salil Parekh said, "We had an exceptional year in financial year 2020 with growth of 9.8 per cent and operating margin of 21.3 per cent. While the immediate short-term will be challenging, looking ahead, we can see that there is a strong interest to consolidate with partners with high-quality and agile service delivery and strong financial resilience. I am confident we will emerge from this stronger."
As of March 31, 2020, the company has robust balance sheet, with around Rs 27,276 crore ($3.605 bn) in cash and cash equivalents, including investments with zero debt.
"We continue to remain focused on execution excellence in a period of high uncertainty. Our relentless focus on liquidity will be supported by our strong Balance Sheet of $3.6 billion cash, backed by accelerated cost take-outs and operational rigor", said Nilanjan Roy, CFO.
Last week, rival Tata Consultancy Services (TCS), the country's largest software exporter, had said it would not lay off any of its nearly 4.5 lakh employees, but decided to freeze salary hike. The Tata group company also announced that it will honour each of its commitments on new hires by taking all the 40,000 people who have been given offers on board. In the financial year 2020, TCS hired 24,179 employees on a net basis, taking up the total headcount to 448,464 as of March 31, 2020.
Wipro has also deferred annual increments and scheduled promotions for the month of June for most of its employees, amid the economic uncertainty caused by the coronavirus pandemic. The company, however, said that it will honour all job offers given to college students during the placement season this year, but the joining dates would be deferred and would be decided later.
Meanwhile, Cognizant plans to slash up to 7,000 jobs in the next few months as part of cost-reduction efforts in wake of coronavirus pandemic. The US-based company -- which has around two lakh employees in India -- would partially exit from content operations business and the move would impact another 6,000 jobs.