For the end of quarter results of India’s number two outsourcer, it has a high expectation. As the first of its peers to release quarterly results, the outsourcing company is responsible for setting the tone for India’s outsourcing sector. When Infosys announced a 2.6 percent in profit for the period of April to June 2010, it was therefore a big disappointment. About the company results, the prior to the release forecasts were positive and the market was optimistic. The company’s profit was expected to be at around 5.56 billion rupees or $330 million, while the report by Edelweiss Securities estimated that the company will be surprising its revenue guidance of a 2.6 – 3.4 percent growth, quarter with ease. The release of Infosys quarter results turned out to be a disappointing event as the company posted a 2.6 percent drop in profit to 14.9 billion rupees or while the global economic environment remains uncertain, they continue to see greater demand for the services from their clients. The number of the economic and operational difficulties have affected the company’s performance, bringing its results down to less than stellar.
In hiring a problems, the Infosys has said that they are seeing a greater demand for the services from their clients. The supply of the quality talent continues to dwindle with the continued economic recovery and increasing competition. The outsourcing firms including Tata Consultancy Services, Wipro, Cognizant and Infosys all lodged a complaint against fellow outsourcer. Accenture due to violation of campus recruitment norms in India. The Indian outsourcing companies often recruitment employees of out of campuses in India as a recruitment strategy.
By the final semester of the school year in accordance with Nasscom, Indian outsourcing companies often recruit employees out of campuses in India. The companies begin placement by the final semester of the school year in accordance with Nasscom. The accenture has been accused of sending placements out a semester ahead of its competitors, earning the ire of fellow outsourcing companies including Infosys. The company has also implemented a new program called the Green Channel in an effort to hire back ex-employees of the company. Reducing the time spent on training new employees. In the last four quarters, the company hired only 1,026 staff which is comparably the slowest pace of hiring in the last four quarters.
In the attrition problem, it is not only hiring that has affected Infosys, margins efforts to cut back on attrition within the company has lead to increased wage hikes among employees. The companies have given an average wage hike 12-14 percent offshore and 2-3 percent onsite to be competitive in an improving demand scenario. In its numbers, contributed to the company falling short. The company’s attrition rate has shot up to 1.8 percent as compared to 11.1 percent and 13.4 percent last quarter. There were a total of 7,833 employees who quit the company. While in the economic problems, the profitability was also hurt by currency volatility, a 30.4 percent higher tax charge and lower billings rates.
REFERENCE:
http://www.blog.infinit-o.com/infosys-disappoints-economic-operational-problems-affect-results/
