BANGALORE: IT industry’s all-out efforts to control expenditure in the backdrop of what could be a grievous multi-year economic downturn has seen the tech posterboy Infosys Technologies now asking its employees to cut cost by at least $10 individually.
Detailing the most serious slowdown faced by the three decade-old IT offshoring story, Infy CEO Kris Gopalakrishnan, in an internal mail circulated to all the employees, says: “If each one of us is able to identify a savings of even $10–not just per day or per month–but $10 as a one-time effort from each one of us, that would translate to a saving of close to $1,000,000—which is a substantial amount.”
The $5-billion Infosys, the country’s second-largest software exporter, has over one lakh employees spread across globally. Mr Gopalakrishnan continues: “I urge each one of you as a key stakeholder of the company’s success, to examine your work environment and look at opportunities that will optimise utilisation and control expenditure. What may appear to be an insignificant saving at the ground level, may well add up to substantial savings when aggregated at the regional or global level..”
Mr Gopalakrishnan’s mail, drawing on varied research reports, has projected a longer recession in the global economy that may severely constrain the IT spending of its several clients.
“The recent economic developments across the globe are forcing all organisations, small, medium and large, to re-evaluate priorities and establish fiscally responsible measures that will ensure sustainability over the next 12–18 months.” Infy honcho’s mail said the recession is expected to continue well into 2009 with US and Japan economies shrinking.
Given this backdrop, Infosys has charted out four main objectives: to increase the billability and utilisation of all its employees around the globe; to increase revenues and margins; to identify cost optimisation opportunities, which may include increased leveraging of its lower cost locations for delivery; to improve the control over spend and optimise return on investment.
Recently, Wipro Chairman Azim Premji sent out mail to all its employees talking about controlling expenditure. Many IT companies have already begun rationalising costs by cutting down travel expenditure and with a freeze on hiring.
The internal mail adds, “As we explore and work through the opportunities toward creating sustainability, each of the units is looking to drive optimisation at all levels, and will draw upon you to support the process in a transparent manner, and with minimal disruption to business. A successful outcome will position Infosys well within the client base, and demonstrate our ability to positively respond to the dynamics of this global economy.”