Tag: infosys

Infosys suffers from senior management crisis

Indian outsourcing outfit Infosys is finding itself short of senior managers.

The company issued a statement insisting that it had enough senior managers to run the business even if more executives clean out their desks and flee India’s second-largest IT services exporter.

N.R. Narayana Murthy played down the departure of at least 11 senior executives since he was brought back from retirement in June last year to help regain market share.

“We are confident that we have enough budding leaders to handle any eventuality of some more people leaving us,” Murthy, who stepped down as the chairman of the company on Saturday, told an annual shareholders meeting.

Still the rate of exits is pretty grim. More than 18.7 percent left at the end of March which is 2.4 percentage points higher than a year earlier, out of a workforce of more than 160,000.

Exits included at least 11 top executives, some of whom were responsible for key business sectors at the company, which was founded by Murthy and six other engineers in 1981.

He said that he didn’t want some of them anyway because they were “low performers.” Why he hired limbo dancers in the first place is anyone’s guess.

Infosys has for the first time picked an outsider – Vishal Sikka, former senior executive at German software company SAP AG as CEO.

Sikka, 47, is considered to be an innovator in the global software industry, particularly when it comes to software which is so esoteric no one is sure what it does. A computer scientist by training, he was key in developing and marketing SAP’s flagship product, HANA, which is believed to help firms analyse large amounts of data quickly, or at least something like that. 

India to relax tax rules for software sector

The Indian government is fighting to keep tax rules favourable for the information technology sector, hoping this will attract software development companies to the country.

Prime Minister Manmohan Singh has put together a panel to ensure the country gets a big bite of the $70-billion industry and to repair the flagging investment from overseas company.
 According to sources within the government, he has recommended favourable tax treatment and a stable tax regime for software sector.

 The India Economic Times reports that the Rangachary panel had many consultations with software experts before producing its recommendation reports. Infosys was just one company that claimed that the tax problem was a “big distraction” for the industry

The Rangachari panel will now work to complete the basis for “safe harbour” rules for each sector by December this year. Tax authorities will then have to accept transfer prices declared by these companies.  

Another big complaint for Indian software companies relates to tax treatment of profits earned from  work that they do at their clients’ sites. Tax authorities have raised demands on these companies, saying that onsite activities cannot be treated as exports and hence do not qualify for a tax exemption.

The government has also said it may look into this at a later date. Indian Standard Time.

Infosys harassment claims dismissed by judge

Accusations that Infosys harassed an employee after he claimed the company smuggled Indian workers into the US have been dismissed by the court.

The company was issued with a lawsuit and investigation after Jack Palmer blew the whistle on the firm claiming that it had misused US issued B1 Visas in a bid to get cheaper labour in the country by paying Indian workers minimum wage.

Jack Palmer also claimed that the company had ignored the fact that it could have found local IT specialists to do what it was bringing poorly paid foreign workers in to do. There have been similar claims in the UK.

Following the claims, Mr Palmer also accused the company of harassment and “deeply troubling threats”.

However, Judge Myron H Thompson ruled in an Alabama court that the company was clear of any wrong doings, meaning the harassment case will now not go to trial before a jury.

He said he had reached the decision as a result of many factors, including that as an at-will employment, “absent a contract providing otherwise, [an] employee may be demoted, denied a promotion, or otherwise adversely treated for any reason, good or bad, or even for no reason at all”.

However, he took note of the alleged threats – which included Mr Palmer’s claim to receiving a note on his PC that said “hope your journey brings you death stupid American” – finding them “troubling”.

He said in a statement: “Without question, the alleged electronic and telephonic threats are deeply troubling. Indeed, an argument could be made that such threats against whistleblowers, in particular, should be illegal.

“The issue before the court, however, is not whether Alabama should make these alleged wrongs actionable, but whether they are, in fact, illegal under state law. This court cannot rewrite state law.”

Infosys is still under investigation by the Department of Homeland Security and a federal grand jury for the claims of visa misuse and smuggling.

Infosys loses around 8000 staff

Indian IT behemoth Infosys is reportedly losing staff, losing around 8,000 in the first quarter of this year alone.   

According to a report in the Times of India, the company’s mission, which tells staff it is running a marathon and not a sprint, has become a burden and turned staff running for the door rather than to the staff room.

And it’s not just the mission statement that’s causing ripples in the company, with previous and current staff citing wage freezes and financial underperformance as further reasons for the mass exodus. Last week the company also gave its staff more ammunition announcing
lower-than-forecast sales as well as reducing its target growth rate to five percent.

Its  business rival, Tata, on the other hand met earnings expectations, showing Infosys staff that the market wasn’t as dire as they had been made to believe.

And companies in this sector are also dangling the wage carrot in front of disgruntled Infosys staff in a bid to gain talent. After four years at Infosys, one employee claims she ran off to to join a rival IT services provider on a 40 percent higher salary.

One employee, who fell for the Infosys romantic set up story – founder NR Narayana Murthy sold his wife’s jewellery in a bid to start up the company in 1981 – told the Times of India that he was frustrated at the way the company was losing ground to competition. He added that the business was “tired” and that top management was unconvincing about the direction in which the company was headed.

“Everyone around talks about leaving as soon they get a better offer,” he said.

Infosys moved to cover its falling staff rate claiming that the drop was normal at the time of year with many leaving their jobs to study.

Indian based IT service providers grow

The top five Indian based IT service providers are continuing to grow.

According to a report by Gartner the companies grew 23.8 percent in 2011, compared to the 7.7 percent of growth for the whole global market.

TCS came out on top with a 2011 market share of 1.1 percent, saw a 2010-2011 growth rate of 29.4 percent and a revenue of $9031 million.

There were some changes at the top – with Cognizant triumphing over Wipro to become the third-largest Indian IT services provider. The company also saw the highest growth rate of 33.3 percent among the top five providers in 2011.

Infosys came in at second place, raking in a 2011 revenue of $6,279.  This contributed to a growth rate of 17.8 percent and a market share of 0.7 percent. However, it hasn’t all been bells and whistles for the company, which has been fraught with allegations of fake visas and low pay.

Last month whistleblower Jay Palmer, who previously worked as an IT consultant for the company, claimed that the service provider smuggled Indian workers into the US. He also claimed that the company had fiddled business visa rules requiring foreign workers to be paid US market rate, and paid them minimal wages.

Earlier this month, the company was dealt a further blow when an anonymous ex worker gave details on how the firm bypassed US visa laws and discriminated against American staff.

However, this hasn’t put companies off using the firm or the competition, with Gartner claiming that the top five service providers have continuously chipped away market share from the large multinational corporation providers.

It said that this was a result of increasingly winning large outsourcing deals, from Fortune 1000 companies, which reached roughly $100 million in the past five years.

Greatly expanding service portfolios and cross selling products such as infrastructure services, business process outsourcing (BPO) services, cloud and analytics services, has also given these companies an edge, Gartner said.

Infosys accused of US visa fraud

Infosys has been dealt another blow after an employee has detailed methods used to circumvent US visa laws, and how the firm systematically discriminated against American staff.

Following the accusations made by Infosys whistleblower Jay Palmer that the Indian firm has been smuggling in workers to the US, another former employee has highlighted ways employees enter the country.

Speaking to ITBusinessEdge, an anonymous former manager from India at Infosys said that the firm had briefed Indian employees of how to get past immigration officials on a B-1 visa.

A B-1 visa allows an individual to travel to the US for sales meetings and so forth, but prohibits actually working.

According to the former Infosys worker, the firm would have “briefing sessions” telling them how to “lie to officials” once they arrive at US customs.

They would be given tips such as not packing Java programming textbooks, for example, in order to hoodwink immmigration officials. With the amount of money promised there was never a shortage of Indian workers who were willing to circumnavigate US immigration laws.

Apparently the Indian company ”doesn’t care” about flouting rules in the US, despite its large presence there.

The same former employee also made claims of systematic discrimination of American recruits.

It is alleged that while Infosys would conduct recruitment drives of college students in the US, new recruits were lied to with the promise of job possibilities.

In actual fact middle management executives at the company had ignored demands by top staff to implement a more culturally diverse recruitment policy and were ignoring potential new recruits.

Despite hiring bright sparks from some of the top unis in the US, the “utilization rate for these people was extremely low”, ITBusinessEdge heard.

The reason that US recruits were not used was that they were unwilling to work the long hours of Indian workers.  

While US workers would want to have evenings free after a days work, it was considered that the Indian cultural work ethic would mean that employees would be willing to spend evenings reporting back to head offices in India.

Consequently, the former Infosys man claimed that he would have to lie to potential new recruits that they had a future at the firm – when the reality was that they would likely join the legions of others who left after just a few months.

UK IT workers betrayed by George Osborne

When the British Coalition government promised to clamp down on immigrant workers who were being exploited at below minimum wage, it is starting to look like it was talking about restaurant chefs – not sorting out the multitude of problems faced by long suffering British IT contractors.

As we reported long ago, big tech business companies in India – such as Infosys and Tata – wield a certain level of influence over parliament. When David Cameron first opened the door to Downing Street, it wasn’t long before Indian industry tycoon, Ratan Tata, pipped most others to an audience. And then was granted a couple more. Indeed, the lingering ghost of the British Empire has been turned on its head as the government wakes up and realises that it needs the emerging superpower far more than the imagined strength of ex-colonial ties would bind them together.

About a year and a half ago, TechEye was one of the few to report on the lingering ICT jobs crises affecting IT workers in the UK. The in-depth run-down is here. But the gist of it is that thousands of IT contractors are out of pocket because business bigwigs are providing cheap labour to import on-site in Britain, rather than going to local qualified candidates, of which there are many. 

Workers were hopeful that the influence of the electorate could at least chip into the stranglehold of lobbyists and big business when the government considered a review. Unfortunately for them, their hopes seem to have been dashed by chancellor George Osborne, who attended the India-UK Joint Economic and Trade Committee (JETCO) with Shri Anand Sharma, India’s Commerce, Industry and Textiles Minister. Vince Cable also attended.

Both parties agreed that there would be a push in investment between the two countries. With this came an agreement that the UK would not alter any of the existing Intra Company Transfer visa laws at least for the next two years. According to a statement issued on the government of India’s Press Information Bureau (PIB), the Coalition also agreed that there would be no salary cap on the transfers. “He [Osborne] acknowledged the contributions of Indian people and praised the performance of Indian companies,” it read. “He [Osborne] added that UK remains keenly interested ingetting highly qualified professionals from India.”

Following a discussion on the “sovereign debt crisis in the Eurozone”, the PIB acknowledged a “fruitful” meeting between Osborne and India’s Finance minister, Shri Pranab Mukherjee, where “issues of mutual interest were discussed”. This seems to be the point where the Coalition decided to make no changes to the ICT visa situation. 

On paper, ICT visas are a way for British companies to employ skilled engineers from abroad. But in practice, the testimonies are quite different. TechEye has heard of workers being forced into shared, cramped accommodation. This would be taken as part of their salaries. ICT workers are encouraged to eat out at restaurants as much as possible and hand in their receipts – which, thanks to a tax loophole, also counts as part of their salaries. As such the workers, it is alleged, are being vastly underpaid for their jobs, work under poor conditions, and take jobs away from well qualified local talent. 

One contractor said of the situation: “It exposes that the government commitments on immigration reduction cannot be met, and it exposes the review of ICT visas, as promised, is a sham.”

Another told TechEye that IT workers in the UK are being “sold down the river by the current government by continuing the previous government’s policies in times of economic hardship.

“Jobs are really needed in this country,” the contractor said. “Not only is this practice very dangerous for employment levels, but it is short sighted as well, all our intellectual property is headed offshore”.

Although currently in work, another IT contractor said he was only in work because a major Indian IT services player was not able to provide someone with the right skill set. Another, the source said, was in work for similar reasons – the services companies get the top priority. 

In an unusual case of whistleblowing, as services workers are often in dicey, insecure positions with their employers, earlier this month, Infosys, an enormous Indian IT services company, was accused of smuggling workers into the United States.  

Infosys accused of smuggling Indian workers into US

Infosys has been called out by an ex employee, who claims the IT company smuggled Indian workers into the US.

The whistleblower – Jay Palmer – who was a consultant for the Indian IT services company, has twisted the knife further, claiming that the company also abused business visa rules requiring foreign workers to be paid US market rate, and paid them minimal wages. 

He told CBS that Infosys ignored the fact that it could have found local IT specialists to do what it was bringing foreigners in to do.

However, it would have had to shell out more for these.

Mr Palmer told the US news channel that he began to get suspicious when he spotted an employee that had been in the US from India several times. He decided to play detective and began looking into why Infosys seemed to be bringing in large numbers of workers from its corporate headquarters in Bangalore into the US.

He added that Indian workers on his team were paid substantially less than an American would have made in the same job, and when the US State Department began to limit the number of H-1B visas, he claimed the company began using another type of visa, known as the B-1.

This visa is meant for employees who are travelling to consult with associates, attend training or a convention. However, Mr Palmer alleged that employees were bought in using these visas for full time jobs.

Of course, Infosys isn’t pleased with the claims. It said in a statement that Palmer’s “allegations make for an interesting story, but it is not the facts.”

It added that it would leave the law to decide what the truth was, with a judge and jury looking into the accusations later this summer.

Ironically, the claims come as the company announced that it would be hiring around 35,000 people this year, with 13,000 of these being specifically for its BPO operations.

It also plans to hire around 1,200 people in the US.

The allegations are not dissimilar to others levied at IT services companies here in the UK, which have been accused of abusing Intra Company Transfer visas to ship in low paid talent from India, rather than hiring local workers.

Indian services industry pulls out of Japan

Given the Japanese radiation crisis deepening at the Fukushima nuclear power plant, Indian IT organisations Infosys, Wipro, HCL Technologies, MindTree, Tata Consultancy Services (TCS) and L&T Infotech are taking no chances as they call back employees from Japan.

Infosys had started the process of bringing back its employees three days ago. It has about 350 employees in couple of offices in Japan, one of them in Tokyo.

Sources close to Infosys said: “Initially, it wasn’t clear if the employees are coming back or not but given the crisis, management has decided to bring back all the employees and started the process of booking tickets.”

Wipro Technologies has offices in Yokohoma and Okinawa. The Indian IT services group has decided to bring back its employees to India and made an arrangement for a chartered flight with Air India.

Saurabh Govil, senior vice president, Wipro HR said: “Wipro is making arrangements for its onsite employees’ travel, including seats on a chartered Air India flight. We will facilitate their working from home or temporarily relocate to safer parts of Japan. Extensive business continuity measures have been put in place so that our customer operations are not impacted.”

HCL Technologies has given an open option to all its employees in Japan – Indian or Non-Indian – to relocate to another location or go on leave. HCL has 400 employees in Japan, Indians making up 50 percent of the total number.

An insider said: “Either the employees may take leave or may also work from China, Singapore or India, but on Japan’s timings.”

MindTree has asked its employees to move their families immediately and will keep a close look on the situation before deciding on bringing back the employees.

L&T Infotech has hired Kingfisher Airlines to operate a special flight on March 17 to bring back its 185 employees and their families back to India.

Infosys, Wipro, TCS want to hire fired ex-employees

Once fired, now eligible to be hired. That’s the case for ex-employees of Indian Business Process Outsourcing (BPO) major player Infosys. Sources close to the Infosys BPO claims that the company management is asking the present employees to refer the experienced ex-employees who were fired during the recession.

A source speaking to TechEye on the condition of anonymity says: “We have been asked to bring our friends to the company which is normal in employee referral programs. But, what is interesting here is we have been asked to bring back the ex-employees who left the company during the recession phase.”

This aggressive hiring strategy is nothing this year as during the end of every year, companies do go for referral hiring. The exception here seems to be the lucrative incentives that human resource management is offering employees for bringing the ex-employees.

During the recession, Indian BPOs including Infosys sent a considerable of employees their pink slips.

Mostly, this practice of offering almost 100 percent increase in referral incentives is practiced by Indian majors. The other companies adopting the same policy are Wipro BPO and Tata Consultancy Services (TCS).

More than 200,000 employees lost jobs during that period which most of the companies rubbished, creating doubt and uncertainty in the minds of many BPO employees in India.

Now, with business getting back on track, these companies are on a hiring spree.

What will be interesting to see is if these companies manage to build the trust that they have lost during the recession by firing the ones who were in need of jobs.