It appears that the downturn in the outsourcing market is over with Infosys, India’s second-largest software services exporter, beating estimates.
The company reported a 21.6 percent rise in quarterly net profit and retained sales growth outlook for this year on surging demand for outsourcing services.
The news is a little surprising as Infosys seems to been reeling under a staff exodus and loss of market share to rivals.
Vishal Sikka, a former senior executive at German software Company SAP took over as CEO last month seen nearly a fifth of his staff leave after 18.7 per cent left in the last quarter.
Infosys added 61 customers in the quarter, maintained its revenue growth forecast for the year to March 2015 at 7-9 percent, as expected.
Consolidated net profit for the quarter ended June 30 rose to $480.20 million. Revenue in the quarter rose 13.3 percent to $212 million.
Three US tech worker groups have launched a labour boycott of IBM, Infosys and Manpower.
Bright Future Jobs, the Programmers Guild and WashTech claim that the outfits discourage US workers from applying for US IT jobs by tailoring employment ads toward overseas workers, writes Nick Farrell.
In one case a Manpower subsidiary has advertised for Indian IT workers to come to the US for openings anticipated more than a year in advance. The advertisements in India are being placed even though the nature of the tech industry is so fast-paced that staffing projections cannot be adequately foreseen.
Not surprisingly the three groups believe that companies should look first for US workers to fill US IT jobs.
The main goals of the boycott are “attention getting” and putting pressure on the IT staffing firms to change their practice.
Infosys denied that it avoids recruiting US IT workers and pointed to job adverts for 440 active openings across 20 states in the US. Many of the jobs require a US master’s degree in business administration.
However there is a general concern that tech companies are lobbying for a relaxation of visa restrictions to cope with a “tech skills shortage” which is not really there. Instead they are bringing in foreign developers who are cheaper than their US counterparts.
While many companies are tightening their belts and looking for austerity measures until the economy picks up, outsourcing outfit Infosys is going in the opposite direction.
According to Indian newspaper, the Economic Times, the first concrete step made public after the return of founder Narayana Murthy to an executive role is to jack up all employee’s salaries.
The company will increase pay by an average of eight percent for staff in India and three percent for overseas staff.
The announcement was made to the stock exchanges after markets closed in Mumbai.
Murthy returned as executive chairman on June 1, 11 years after he was last CEO of Infosys. The move is intended to boost flagging morale at the company and to enhance Murthy’s stock of goodwill. It is also sending a message that the Infosys co-founder is back and means business.
The company has had two years of disappointing results and starting to lose market share to rivals such as Tata Consultancy Services and Cognizant Technology Solutions.
The pay increase will be effective July 1 for most staff, while the company’s global sales force will see increases effective May 1, the company said.