Infosys's attrition level at record high
Highlights
- Infosys recruited 8,000 people in the June quarter, including about 2,500 freshers
- But since attrition is high, the net addition was only 906, significantly lower than TCS's 12,356
(File photo)BENGALURU: Infosys is battling one the worst attrition rates in the company’s history. The attrition level rose to 23.4% in the June quarter, from 20.4% in the preceding one, and 23% in the year-ago quarter. In a rare admission, the company said it had a higher percentage of layoffs in the quarter.
Chief operating officer (COO) UB Pravin Rao said Q1 has historically had higher attrition because people go for higher education. "In addition to that, we have a higher percentage of involuntary attrition. The attrition also reflects demand for talent across areas,” he said.
When TOI asked chief executive officer (CEO) Salil Parekh about ongoing layoffs in job level 7 and higher (general manager and above), he declined to comment.
Rao said a big part of attrition is at lower levels and the current compensation review exercise is addressing it. “We believe attrition will come back to manageable levels," he said, adding that attrition among high performers is already lower.
Infosys recruited 8,000 people in the June quarter, including about 2,500 freshers. But since attrition is high, the net addition was only 906, significantly lower than TCS's 12,356. “We are looking at about 18,000 hires in this financial year,” Rao said.
Rao said subcontracting costs (money paid to those who supply people, including in the US) have gone up and is now 7.5% of revenue. “It is an integral part of the supply chain. Sometimes we have shortage of skills and we require subcontractors in the short term. We expect to keep it in the 6.5% to 7.5% band,” he said.
Chief operating officer (COO) UB Pravin Rao said Q1 has historically had higher attrition because people go for higher education. "In addition to that, we have a higher percentage of involuntary attrition. The attrition also reflects demand for talent across areas,” he said.
Infosys pulls ahead of TCS after long time
The growth was faster than that in the previous quarter, and after a long time, it pulled well ahead of TCS. The latter, which announced its results earlier this week, had seen growth slow down to 10.6%, from 12.7% in the previous quarter. Infosys’s performance allowed it to raise its revenue growth forecast for the year to 8.5-10%, from 7.5-9.5%.
When TOI asked chief executive officer (CEO) Salil Parekh about ongoing layoffs in job level 7 and higher (general manager and above), he declined to comment.
Rao said a big part of attrition is at lower levels and the current compensation review exercise is addressing it. “We believe attrition will come back to manageable levels," he said, adding that attrition among high performers is already lower.
Infosys recruited 8,000 people in the June quarter, including about 2,500 freshers. But since attrition is high, the net addition was only 906, significantly lower than TCS's 12,356. “We are looking at about 18,000 hires in this financial year,” Rao said.
Infosys revises cap allocation policy to return 85% of free cash flows
This will cheer investors. Infosys has revised its capital allocation policy to return 85% of the free cash flows beginning this fiscal, compared to the earlier policy of returning up to 70%. This it said would be done through a combination of semi-annual dividends, share buyback and special dividend.
Rao said subcontracting costs (money paid to those who supply people, including in the US) have gone up and is now 7.5% of revenue. “It is an integral part of the supply chain. Sometimes we have shortage of skills and we require subcontractors in the short term. We expect to keep it in the 6.5% to 7.5% band,” he said.
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