Billionaire tech pioneer Nilekani takes on Amazon, Walmart in India

 India has become a battlefield for some global retail behemoths that are either shut out of China or are struggling to compete with local rivals there

He co-founded software powerhouse Infosys Ltd., became a billionaire and went on to spearhead a colossal government program to create biometric identification for India’s almost 1.4 billion people. Now 66, Nandan Nilekani has one more ambitious goal. The high-profile mogul is helping Prime Minister Narendra Modi build an open technology network that seeks to level the playing field for small merchants in the country’s fragmented but fast-growing $1 trillion retail market.

Its stated purpose is to create a freely accessible online system where traders and consumers can buy and sell everything from 23-cent detergent bars to $1,800 airline tickets. But its unspoken objective is to eventually curb the powers of Amazon.com Inc. and Walmart Inc.-owned Flipkart, whose online domination has alarmed small merchants and the millions of local mom-and-pop stores, called kirana, that form the nation’s retail backbone…

Three Infosys employees with I-T dept held for taking bribes from taxpayers

The police suspected the trio might have made about Rs 15 lakh so far as commission from taxpayers

Three Infosys employees, attached to the Income Tax department’s Centralised Processing Centre here, were arrested for allegedly taking bribes from tax-payers for speedy processing of their refund, police said on Sunday. According to police, the key accused among the three was attached to the CPC’s data division and had demanded and collected money through his friends from some major taxpayers with whom he had contact over phone for processing their I-T refund claims at the earliest.

He would allegedly charge them four per cent of the refund money as his commission, they added. Recently, one of the taxpayers refused to pay the money and shared the audio recording of his conversation with the accused with Income Tax officials who held an internal enquiry and then approached the police. The Electronics City police have registered a case of cheating and criminal breach of trust against them. The police suspected the trio might have made about Rs 15 lakh so far as commission from taxpayers.

Jeff Bezos teams up with Narayana Murthy to enter India’s food delivery biz

Amazon’s entry in the food delivery business comes at a time when Zomato and Swiggy have started cutting back on discounts

Amazon is all set to start its food delivery business in India from Bengaluru next month, says a news report in The Economic Times. The launch of the service, which would be offered as part of either Amazon’s Prime Now or Amazon Fresh platform, could happen as soon as next month. With this, Amazon will take on estabished players such as Zomato and Swiggy.

Executives at two restaurants, who did not want to be named, confirmed that Prione Business Services, a joint venture between Infosys cofounder NR Narayana Murthy’s Catamaran Ventures and Amazon India, has been signing contracts with brands to list on Amazon, offering 10-15% commissions, the report said. The report points out the e-commerce giant had already started pilot testing its service in select parts of Bengaluru, and by March, it will be rolling out to other parts of the country, says a news report in Dainik Bhaskar

Amazon’s entry into the food delivery market would create new challenges for Prosus Ventures -backed Swiggy, and Zomato, a 10-year-old startup that acquired Uber’s Eats business in India for about $180 million in January. Amazon’s entry in the food delivery business comes at a time when Zomato and Swiggy have started cutting back on discounts. Last month, Bezos told the audience at an Amazon event in New Delhi that the company plans to invest $1 billion in India.

Would love to see a Bangladeshi immigrant next Infosys CEO: Nadella on CAA

Satya Nadella said saying he would love to see a Bangladeshi immigrant create a Unicorn in India or become the next CEO of Infosys

Microsoft’s Indian-origin CEO Satya Nadella on Monday voiced concern over the contentious Citizenship Amendment Act (CAA), saying what is happening is “sad” and he would love to see a Bangladeshi immigrant create the next unicorn in India.

His comments came while speaking to editors at a Microsoft event in Manhattan where he was asked about the contentious issue of CAA which grants citizenship to persecuted non-Muslim minorities from Pakistan, Bangladesh and Afghanistan. “I think what is happening is sad… It’s just bad…. I would love to see a Bangladeshi immigrant who comes to India and creates the next unicorn in India or becomes the next CEO of Infosys,” Nadella was quoted as saying by Ben Smith, the Editor-in-Chief of New York-based BuzzFeed News.

In a statement issued by Microsoft India, Satya Nadella said: “Every country will and should define its borders, protect national security and set immigration policy accordingly. And in democracies, that is something that the people and their governments will debate and define within those bounds.

“I’m shaped by my Indian heritage, growing up in a multicultural India and my immigrant experience in the United States. My hope is for an India where an immigrant can aspire to found a prosperous start-up or lead a multinational corporation benefitting Indian society and the economy at large”.

Infosys fined $800,000 for worker misclassification, tax fraud in US

California initiated legal actions against Infosys after a compliant was filed by whistleblower Jack ‘Jay’ Palmer, a former Infosys employee

Infosys, India’s top IT major, has agreed to pay $800,000 to settle allegations of misclassification of foreign workers and tax fraud, officials announced Tuesday. Infosys will pay California $800,000 (nearly Rs 56 crore) to resolve allegations that between 2006 and 2017, approximately 500 Infosys employees were working in the State on Infosys-sponsored B-1 visas rather than H-1B visas, California Attorney General Xavier Becerra said.

This misclassification resulted in Infosys avoiding California payroll taxes such as the unemployment insurance, disability insurance, and employment training taxes. H-1B visas also require employers to pay workers at the local prevailing wage, an official statement said. “Today’s settlement shows that attempting to evade California law doesn’t pay. Infosys brought in workers on the wrong visas in order to underpay them and avoid paying taxes. With this settlement, California has been made whole,” Becca said.

In the settlement, Infosys, however, denied the allegations and asserted of no wrongdoings. In 2017, Infosys had agreed to pay the State of New York $1 million to settle allegations of submitting wrong documents to federal authorities. The Californian settlement that was carried out in November was released to the media on Tuesday…

IT companies may shed up to 40,000 mid-level employees: Mohandas Pai

‘It’s going to happen again and again and again every five years,’ said Pai

India’s information technology services companies may shed 30,000 to 40,000 middle-level employees this year as growth slows down, IT industry veteran T V Mohandas Pai said Monday. The former Chief Financial Officer of IT major Infosys Ltd termed these job losses as once-in-five-years normal phenomenon with maturing of the industry.

“As in all sectors in the West, in India too when a sector matures so many people will be there in the middle level who will not be adding value to the salary they get,”Mohandas Pai PTI. Promotions are okay when companies are growing fast but when it slows down, people getting fat salaries will aggregate at the higher level, prompting companies to periodically reset their pyramids, and shedding people, he said.

“It’s going to happen again and again and again every five years,” said Pai, Chairman of Aarin Capital and Manipal Global Education Services. “Nobody is entitled to a fat salary and high-paying job unless you perform, right? You have to deliver value”. “All across industry, may be 30,000 to 40,000 in a year…,” he said when asked about the number of middle-level staff who would lose their jobs. But Pai said about 80 per cent of those who lose jobs would have employment opportunities in industries in general if they are specialists….

Second whistleblower letter launching personal attack on Infy CEO, surfaces

This is said to be the ‘undated’ letter that Infosys had earlier informed in regulatory filing

Days after a whistle-blower letter accused Infosys CEO Salil Parekh of “unethical practices”, another such letter has now surfaced, which has brought in several personal allegations against him.

Addressed to independent directors of the board and the chairman of Nomination and Remuneration Committee (NRC) at Infosys, the undated letter alleged that while Parekh continues to remain absent in the headquarters in Bengaluru, he prefers to stay in Mumbai to protect his personal investments in small companies.

The whistleblower, who claimed to be part of Infosys‘ finance team, has also alleged that Parekh was not able to control cost and was leading the company towards a low margin regime. In the three-page letter which has been seen by Business Standard, the whistleblower has also launched vicious personal attacks against Parekh.

While the company declined to comment, it is reliably learnt that Infosys had earlier informed the exchanges on October 22 about receiving two whistleblower mails including an undated one. The letter which has now been leaked to media, is said to be the same undated letter…

Even God can’t tweak Infosys’ financial numbers, says Nandan Nilekani

“Our goal is to close this (investigation) in the best possible time. I really can’t give any timeline because that will not be fair to the investigators,” Nilekani said.

For the first time since the whistle-blower allegations rocked Infosys, its co-founder and chairman, Nandan Nilekani, on Wednesday came out in full support of the current management in execution of its growth strategy. He also vouched for “strong processes” in place at Infosys, saying that even god can’t tweak the financial numbers at the information technology (IT) services firm.

“Infosys has very strong processes. Even god can’t change (financial) numbers in this company. We have an outstanding finance team with people of highest integrity and they are actually feeling insulted due to these accusations,” Nilekani said at the post-earnings analyst call. “But, again, I don’t want to be biased when the investigation is on. So, let the report come.”

In a letter dated September 20, an anonymous group calling itself ‘Ethical Employees’ alleged that Infosys’ management was taking “unethical” steps to inflate short-term revenue and profit. According to the allegations, while around $50 million of visa cost had been deferred, revenue recognition in large deals was not in compliance with the accounting standards. The audit committee of the company is investigating the matter.

“Our goal is to close this (investigation) in the best possible time. I really can’t give any timeline because that will not be fair to the investigators,” Nilekani said. Despite the distraction created by these whistle-blower allegations, the non-executive chairman of the board said, it was business as usual for the firm and the large deal flow remained robust on the back of strong support from customers.

Nilekani steps in as Infosys investors fume over whistleblower complaints

EY, Shardul Amarchand to conduct probe; CEO, CFO recuse themselves

Infosys co-founder and company Chairman Nandan Nilekani has once again emerged as the man of the moment even as the firm he leads grapples with another crisis-like situation and an erosion of more than Rs 53,000 crore in market cap following allegations of unethical practices.

As soon as the markets opened on Tuesday after a holiday, Nilekani swung into action by informing the exchanges that the company was conducting an investigation into the complaints of a whistle-blower. Sources in the know said he attended an audit committee meeting at the Infosys campus on Tuesday. D Sundaram, Punita Kumar-Sinha, and Roopa Kudva are members of the committee.

“The chairman is in control of the situation and is engaged with all stakeholders to assuage the concerns of investors,” said a person familiar with the development. Nilekani steps in as Infosys investors fume over whistleblower complaint.

The company is also learnt to be looking into the circumstances in which confidential financial information was recorded and stored as claimed in the whistle-blower’s letter. However, this hardly helped the situation with the company’s share prices plunging 16.21 per cent to settle at Rs 643.30 on the BSE. This is the sharpest intra-day fall in Infosys shares in more than six years. It erased the IT major’s market cap by Rs 53,131 crore and dragged it below Rs 3 trillion.

Infosys vs TCS: Which stock is a better bet at the current levels?

Post the results, most brokerages have revised their price targets for both these stocks.

Infosys and Tata Consultancy Services announced their respective June quarter results for the financial year 2019 – 20 (Q1FY20) last week. While Infosys registered 5.26 per cent rise in its Q1FY20 net profit at Rs 3,802 crore, TCS saw an uptick of 10.74 per cent in its profit after tax (PAT) to Rs 8,153 crore.

An uptick in demand for its digital services, apart from a momentum in the large deal space, prompted the Infosys to raise its FY20 revenue guidance to 8.5-10 per cent from 7.5-9.5 per cent as guided earlier. The company now plans to return 85 per cent of the free cash flows (FCF) in the form of buybacks or dividends on a five-year cumulative basis (70 per cent earlier).

Post the results, most brokerages have revised their price targets for both these stocks. For TCS, The number of ‘buy’ ratings for the stock has reduced from 27 to 23, while ‘sell’ calls have increased from 7 to 9. The average 12-month price target has also seen a slight reduction On Monday, Infosys reacted to the Q1FY20 results announced post market hours on Friday, with the stock rising over 4 per cent to Rs 758 levels.

Here’s how brokerages have interpreted Infosys‘ results:

Nomura

We believe increased FY20F revenue growth guidance, strong deal win momentum and improved capital allocation policy are positive. Our target price of Rs 680 is based on 16.5x FY21F EPS of Rs 41.4. The stock is trading at around 17x FY21F EPS on consensus estimates. We prefer HCL Technologies in the IT services space. Material margin improvement and an improvement in the growth trajectory in BFSI/retail are key risks to our thesis.

Jefferies

Management indicated broad-based demand across verticals & geographies, helped by digital adoption and large transformation projects. In BFSI, challenges in select US banks due to M&A and in capital markets across Europe & US are being offset by strength in other segments, such as retail banking and cards & payments. European manufacturing and healthcare are relative weak spots. High attrition in Q1FY20 was partly attributed to seasonality and involuntary attrition.

Infosys stock slumps 5% most since August 21, 2017; NSE IT index falls 1%

Wipro, TCS and HCL Technologies ended with gains of more than half a per cent

 

Infosys Ltd is a global technology services firm that defines designs and delivers information technology (IT)-enabled business solutions to their clients. The company provides end-to-end business solutions that leverage technology for their clients including technical consulting design development product engineering maintenance systems integration package-enabled consulting and implementation and infrastructure management services.

The company also provides software products to the banking industry. They have developed Finacle a universal banking solution to large and medium size banks across India and overseas. Infosys BPO is a majority owned subsidiary. Through Infosys BPO the company provides business process management services such as offsite customer relationship management finance and accounting and administration and sales order processing.

The company is having marketing and technical alliance with FileNet IBM Intel Microsoft Oracle and System Application Products. Infosys Ltd is a public limited and India’s second largest software exporter company was incorporated in the year 1981 as Infosys Consultants Pvt Ltd by Mr.N.R.Narayana Murthy at Karnataka.

Infosys shares fell 4.55 per cent on Thursday, the most since August 21, 2017. The stock ended at Rs 1,284 after climbing to a lifetime high of Rs 1,354 on Tuesday.

The stock is still up 24 per cent this year. In comparison, the benchmark Nifty has gained two per cent and the Nifty IT index, a gauge for the performance of technology stocks, has gained 20 per cent in 2018. The NSE IT index on Thursday fell just 1.1 per cent as other heavyweights Wipro, TCS and HCL Technologies ended with gains of more than half a per cent amid the rupee closing at a new low of 68.94 against the dollar.

The exact reason for the sell-off in the stock, which caused a market cap erosion of Rs 131 billion, was not evident.

Read More :- Infosys  share price

Q4 results: Infosys stock could dip today on lower margin guidance

The main reason for the lower margin guidance is investments in the digital business

Companies news : Information-technology major Infosys' January-March quarter numbers, announced on Friday, were in line with analysts' expectation. Despite this, they say the stock might come under pressure in Monday's trading session. The first reason is the feeble performance of Infosys' banking, financial services and insurance (BFSI) segment, almost no revenue growth sequentially in constant currency terms. Retail and life sciences revenue down 0.7 per cent sequentially in constant currency terms; contribute 55 per cent to its revenue. While the management expects BFSI to improve in 2018-19, the retail (along with consulting) segment is likely to remain under pressure.

Second, though Infosys' 2018-19 revenue growth forecast of 6-8 per cent in constant currency terms was at par with expectation, its earnings before interest, tax, depreciation and amortisation (Ebitda) margin forecast of 22-24 per cent was below the current level. This comes in spite of a contraction in Ebitda margin, witnessed in the past four years.

The main reason for the lower margin guidance is investments in the digital business. Increased focus on high-yield business will benefit the company. But, the lower guidance has led to some analysts being sceptical of Chief Executive Officer (CEO) Salil Parekh's confidence. "While lowering the Ebit margin may disappoint investors in the near term, we view it as a medium-term revenue accelerator," says Abhishek Bhandari, analyst at Macquarie Research. According to Emkay's latest report on Infosys, the weak profitability expectation at 22-24 per cent suggests the new CEO's low confidence in the company's current capabilities. Many analysts said Infosys' capital allocation steps would support the stock price in the near term.

Click here: Infosys Q4 results 

Infosys to leave turmoil behind as Salil Parekh takes over as CEO today

Salil S Parekh will take over as the chief executive of Infosys on Tuesday

 

Salil S Parekh will take over as the chief executive of Infosys on Tuesday as the information technology (IT) bellwether looks to shed its past year of turmoil and forge ahead with a focus on execution and grow business by engaging clients via digital contracts.

For Parekh, a former Capgemini executive who rose through the ranks to be on its global board after successfully building its offshore base in India, the top job at Infosys will be his first that will put him under public scrutiny. So far, Infosys, listed on the Indian and global stock exchanges, has built its reputation on transparency and good corporate governance.

A lapse in disclosure by former CEO Vishal Sikka, who took charge in August 2014, about offering severance pay 10 times the standard contract to former chief financial officer Rajiv Bansal had escalated into a public spat between the board and the founders led by N R Narayana Murthy. This had resulted in the resignation of Sikka and R Seshasayee, then board chairman, last August, paving the way for co-founder Nandan Nilekani to return at the helm.

Nilekani realises that he has to stay longer at Infosys to ensure a smooth transition for Parekh, who will operate out of its headquarters in Bengaluru. Parekh will also need to fit in a culture of frugality that Murthy and Nilekani built over the past three decades, engage with in-house talent and ensure higher returns to stakeholders.

An operational man, Parekh had led the growth trajectory for Capgemini India as an offshore destination to deliver client projects and help the European firm remain competitive. During his tenure, Capgemini team grew from 800 people to over 85,000 people in India, which included leading the acquisition of iGATE Corp....

Read more: Infosys CEO Salil  S Parekh

Trump wrong about H-1B? Threat of 'being Bangalored' illogical: US study

In fact, report says immigration bans will lead to greater outsourcing by US firms

 

 

Did US President Donald Trump get his H-1B visa math wrong? A report by a US think tank, the National Foundation for American Policy (NFAP), thinks he did.

One of the key findings of the report was that fears in the US that H-1B visas granted to foreign workers, especially Indian techies, were draining the job market of opportunities for the natives were exaggerated at best, and, "illogical" if seen in the context of data.

The 9,356 new H-1B petitions for the top seven Indian-based companies approved in financial year 2016 represent "only 0.006 per cent of the US labour force" , the report said, adding that while the "threat of job loss has long been exaggerated by critics, it reaches illogical proportions when discussing fewer than 10,000 workers in an economy that employs 160 million workers nationwide".

In April this year, Trump signed an executive order called 'Buy American and Hire American' to protect the American industry from unfair competition and stop the "misuse" of H-1B visas| economy news

• The numbers just don't add up

According to the 'H-1B Visas by the numbers' report by NFAP, the April 2017 unemployment rate in the US for "computer and mathematical science" occupations was 2.5 per cent – a very low rate, even lower than the 4.4 percent for "all occupations", according to Bureau of Labor Statistics data. The unemployment rate for "architecture and engineering" occupations is even lower at 2.1 per cent.| economy policy

• More jobs than workers
• Visa restrictions could actually kill more jobs
• Trump's lower wages argument may be wrong too

Pink slips galore: Wipro, Infosys, Tech Mahindra, Cognizant cut India jobs

Tech Mahindra recently fired close to 1,000 employees; Wipro was the canary in the coal mine

 

Once India's global claim to fame, the country's information technology (IT) sector is seeing a spate of layoffs by IT majors like Tech Mahindra, Wipro, Infosys and Cognizant. 

The churn in the IT sector — which is moving towards increasing automation, use of artificial intelligence and is beset by tightening visa regulations — is likely to affect mid-level employees with 10-15 years of experience the most, as many are averse to learning new skills, industry experts have said.

Further, Indian IT firms are witnessing their slowest growth in a decade, while global firms are shifting their budgets from traditional IT services to newer areas such as digital and cloud, which require engineers to engage with clients instead of working remotely. Even as this shift takes hold of the sector, automation is increasingly taking over low-end maintenance work, forcing companies to shift workers to other projects and reduce hiring from campuses. 

Tech Mahindra joins the bandwagon

As reported earlier, software services firm Tech Mahindra has sacked a thousand-odd employees this month. 

However, what happened at Tech Mahindra is not an outlier, other IT majors like Wipro, Cognizant, Infosys and Capgemini are also facing their own share of challenges, and moving to either prune or re-skill their respective workforce. 

“We have a process of weeding out bottom performers every year and this year is no different,” a Tech Mahindra spokesperson said.

As on December 31, 2016, the company’s total employee headcount stood at 117,095, while the software division had 80,858 employees. 

Wipro was the canary in the coal mine

Late in April, Wipro move to sack around 500 of its employees as part of its appraisal process. (Read more) 

The company is reported to have weeded out "non-performers" after a "rigorous performance appraisal". 

While Wipro did not specify the exact number of affected employees, the company said it “undertakes a rigorous performance appraisal process on a regular basis to align its workforce with the business objectives, strategic priorities of the organisation, and requirements of our clients”.

“This systematic and comprehensive performance evaluation process triggers a series of actions, such as mentoring, retraining and up-skilling. The performance appraisal may also lead to the separation of some employees from the company and these numbers vary from year to year,” it said. (READ MORE)

Carnage in Indian IT? As Wipro fires 500, here is what other cos are doing

Trump's tightening H-1B visa norms, AI and automation are weighing heavy on India's IT workers

 

Wipro's move to sack around 500 of its employees as part of its appraisal process is indicative of the churn in India's information technology (IT) sector — which is moving towards increasing automation, use of artificial intelligence and is beset by tightening visa regulations.

he company is reported to have weeded out "non-performers" after a "rigorous performance appraisal". However, what happened at Wipro is not an outlier, other IT majors like Cognizant, Infosys and Capgemini are also facing their own share of challenges, and moving to either prune or re-skill their respective workforce. (Read more) 

The real bloodbath could be at Cognizant

US-listed IT major Cognizant Technology Solutions, which has a significant workforce in India, is said to be reducing its employee count by as much as five per cent, which translates to close to 10,000 workers, as reported in March this year

Globally, the company employs around 260,000 employees, of this around 75 per cent of the workforce is based in India. 

Here too, according to what the company spokesperson told Business Standard, the layoffs will take place as part of the Cognizant's performance review process. Typically, the bottom one per cent of the workforce is weeded out for non-performance, a common practice across IT firms as part of the annual appraisal exercise. The appraisal process generally ends by March.| (READ MORE)

Severance pay row: Why Rajiv Bansal may have the upper hand against Infosys

Rajiv Bansal left the Infosys in 2015

 

Former Infosys chief financial officer Rajiv Bansal may have an upper hand in the arbitration with Infosys seeking the remaining severance pay. Human resource and legal experts say in such cases employees stay in favour as courts and tribunals consider them vulnerable before a large company or organisation. 

“Bansal has invoked his rights to an arbitral tribunal, and former Supreme Court judge RV Raveendran has been appointed sole arbitrator in the case. The first arbitration meeting is scheduled in May. Law firm Indus Law is representing Bansal, while Nishith Desai Associates is Infosys's counsel in the matter,” Times of India first reported this development based on sources. 

Of the Rs 17.38 crore agreed upon between the company and Bansal, Infosys paid him Rs 5 crore and the rest was held back. Bansal left the company in 2015. The software drew flak from founders and co-founder N R Narayana Murthy for offering such large amount of severance package to a senior executive. 

Salman Waris, Managing Partner, TechLegis Advocates and Solicitors, says in such a high-profile case, chances are higher that Infosys settles this matter out of court.

(read more)

Trump's new order: Indian IT sees red as H-1B visa window gets smaller

Analysts say the impact on Indian entities would not be immediate

 

An executive order signed by US President Donald Trump on Wednesday (Indian time) to protect American industry, has also targeted Indian information technology services firms, who depend on H-1B visas to send engineers to work on projects to the US. 

Trump has directed his top administration officials — the Secretaries of State, Labor and Homeland Security along with the Attorney General — to suggest reforms, so that the H-1B visas are given to the most skilled or highest paid beneficiaries. 

The move by Trump will help Silicon Valley-based entities such as Google, Facebook and Oracle to take advantage of the programme to get more engineers from India to work on projects back home. At the same time, it is expected to hurt outsourcing companies majors here, such as Tata Consultancy Services (TCS), Infosys and Wipro, which traditionally have used the H-1B visa programme to send engineers to work on projects at customer locations in America. 

This has riled the National Association of Software and Services Companies (Nasscom), which says there is a campaign to discredit the Indian services sector and the move would hurt the American economy, as the US faces a shortage of computer engineers. It would benefit only Silicon Valley companies at the cost of the rest of America.

“Regarding the concept of reorienting the H-1B lottery to be a system that prioritises the “most-skilled or highest-paid” visa applicants, the (US) Administration needs to be careful about unintended consequences,” it stated.

“Using salary levels as the metric is not necessarily the best indicator of benefits to the US economy. And, unless such a system reflects variations in wages in all parts of the US, it could advantage certain regions such as Silicon Valley over other regions of the US.” 

TCS, this country’s largest software exporter, says it has reduced the number of visas it has applied over the past few years, and has several local development centres in the US, hiring local engineers.

“We have to watch what the visa issues are. Are they going to be constraints for having the right people on projects? We have taken a view of this and our dependency on visas has been reducing. Our strategy is to move to a regime where our operating model should be visa-neutral,” says N G Subramaniam, chief operating officer at TCS.

(read more)

Infosys vs founders: Full text of Murthy's letter on COO Rao's pay hike

I recruited Pravin in 1985 and nurtured him throughout my stay at Infosys since then, says Murthy

Infosys founders, led by N R Narayana Murthy, on Sunday criticised the proposed salary hike of Chief Operating Officer (COO) Pravin Rao, deepening the rift between them and the board of the country’s second-largest software exporter on governance issues.

Here is the full text of Murthy's letter explaining his stand on COO Pravin Rao's pay hike

Dear Folks,

I have lots of affection for Pravin. Let me state you the facts.

I recruited Pravin in 1985 and had nurtured him throughout my stay at Infosys since then.

He had been sidelined. He was not even a member of the Executive Council at Infosys in 2013 when I came back. Kris, Shibu snd I encouraged him, elevated him to the board, and made him the COO when we recruited Vishal as the CEO. So, this abstention has nothing to do with Pravin.

Those of us who have always stood for fairness in compensation and practised it, right from the day Infosys was founded, will have to demonstrate it when needed. This is a time when it is needed. Nothing more and nothing less.

I believe in striving towards reducing differences in compensation and equity in a corporation. You may not know that my Infosys salary at the time of the founding of Infosys was just 10% of my salary in my previous job. I ensured that my younger, co-founder colleagues got 20% higher salary over their salaries in their previous job even though I was 7 levels above them in my previous job and was 11 years older than them. I gave them huge equity compensation the like of which has never been replicated in this world. So, this abstention comes from somebody who has walked the talk.

I have always felt that every senior management person of an Indian corporation has to show self restraint in his or her compensation and perquisites. He or she has to fight for maintaining a reasonable ratio between the lowest salary and the highest salary in a corporation in a poor country like India. The board has to create a climate of opinion for such a fairness by their actions.

This is necessary if we have to make compassionate capitalism acceptable to a majority of Indians who are poor. Without compassionate capitalism, this country cannot create jobs and solve the problem of poverty. Experts tell me that capitalism may come to an end in the not-so-distant future if the current corporate leaders do not heed this advice in India...(READ MORE_)

 

Get rid of 3-month notice period: Techies ask govt to ease quitting process

latest | The government should make it easier for IT professionals, who are expecting single-digit hikes in the coming financial year, to exit their jobs, an online petition signed by over 28,000 professionals has demanded, reported The Economic Times on Thursday.

Their complaint? The three-month non-negotiable notice period that most IT firms hold their employees to. According to the report, the petition said, "It is unrealistic for anyone to plan that far ahead for their future actions and resign in advance not knowing state of the issue in next three months." The petition has been addressed to the Union Ministry of Labour & Employment.

Speaking to the financial daily, an IT professional, who did not want to be named, said that no company would be willing to wait for three months while their new employee serves out his or her period at their old firm. Further, the report said that Tata Consultancy Services, Infosys, Tech Mahindra, HCL Technologies, Capgemini, Accenture and IBM had a three-month notice period in place.

Growing pains

Indian companies are likely to provide single digit increments to their employees in 2017, across industries, an Aon Hewitt survey said recently. “The survey projects a drop in pay increases to an average of 9.5 per cent across industries. While it’s a marginal decrease from the 2016 (10.5 per cent) spends, it reflects maturity that India Inc has displayed amid global and Indian economic and political events. This includes recent changes in the US government and the much-talked demonetisation,” the report said. Aon Hewitt, the global talent, retirement and health business of Aon plc, conducted its 21st annual survey after speaking to more than 1,000 companies.

The Indian IT sector, and its employees, will not escape this predicament either. According to ET, Tech Mahindra has already suspended the salary revision process for employees with more than six years of experience, pending a management review.

The petition comes at a time when the IT sector is gearing for a shake up. As reported earlier, Indian IT services players may have to re-skill significant chunks of their workforce to drive the digital technology transformation. A report from global advisory firm McKinsey & Company, which was presented at the Nasscom India Leadership Forum last month, said that nearly half of the workforce in the IT services firms would become “irrelevant” over the next three-four years. 

Further, digital disruption is not the only thing worrying the industry. Last month, industry body Nasscom unexpectedly postponed issuing a growth projection for 2017-18, a first in 25 years, in the wake of uncertainty due to regulatory changes in the US and the macroeconomic outlook. 

(Read more)