Infosys is planning to cut costs by $100-$150 million in FY20, as the software major recruits more freshers to minimise employee expenditure and realigns roles for middle and senior-level management, Chief Financial Officer (CFO) Nilanjan Roy said on Wednesday.
The tech company's margins have fallen substantially under its CEO Salil Parikh on account of a boost in investments to promote growth. But Infosys is now looking at cutting corners as large part of its investments have concluded.
"There are 21 tracks we are looking at for cost-optimisation. We are targeting $100-$150 million in cost savings as the year goes on," Roy said at the analyst meet.
He added that Infosys was geared towards bettering the bottom-end of its pyramid, which had become more barrel-shaped, by recruiting freshers. "It was also looking to recreate the pyramid onsite through fresher hiring," he stated.
Roy further said that Infosys would shift to an asset-lite model for new infrastructure.
In the past year, the company has hired 1,700 freshers in the US and Europe.
However, according to analysts, the cost optimisation is a routine move to minimise costs by hiring freshers. But, Infosys clarified that it had no plans of firing existing employees.
"There is no planned layoff. We have performance reviews and people who are not performing are asked to leave. This is normal, there is no targeted layoff," chief operating officer (COO) UB Pravin Rao said.
Rao had on October 11 informed analysts that both voluntary and involuntary attrition for tech services was around 19.4% in the September quarter as compared to the same quarter in the previous year. Out of this 17% alone was voluntary.
Voluntary attrition is when an employee leaves the company for a better job opportunity elsewhere, while involuntary is forced and is caused by layoffs.