Infosys cuts US staff, forms service alliance with Microsoft

Infosys Technologies, India's second largest software exporter, is reported to have slashed its US workforce amidst a slackening of business and falling margins in the fourth quarter of the current financial year.

Infosys also announced the launch of a centre of excellence in alliance with Microsoft for supply chain management as it bids to cut costs. The two will jointly market solutions and services.

The fusing of expertise and intellectual property is expected to help both Infosys and Microsoft to improve customer service and supply chain agility and performance, an Infosys statement said.

The company, which reduced its on-site employees in the US, is also planning to reduce variable pay-out to its employees worldwide expecting a further dent in US demand.

"Infosys has a variable pay structure that has been created to link individual employee compensation to the company's performance. This variable pay structure is dependent on company, unit and individual performance," an Infosys spokesperson said.

The variable pay allows Infosys employees to benefit from an improved performance of the company and vice versa during a downturn.

"We undergo an organisation restructuring at periodic intervals, during which a very small number of roles may get redundant due to merger/consolidation at the business unit level,'' said an Infosys spokesperson, adding, ''This is a normal process".

Nasdaq-listed Infosys said it is following a policy of ''limited tolerance'' to poor performers and has put its low-ranking workforce under the scanner in a bid to reduce flab.

"We have a performance management system in which people are categorised into various groups based on their performance. We have a personal development plan to improve their performance. If they don't improve even after them being part of the plan, we let them go", he stated.

The company did not detail the number of people who have so far been asked to quit or those who have voluntarily gone under this category.

Infosys, however, said its hiring plans are well on track and may hire well over 25,000 people this fiscal, depending on the company's prospects.

The company, which had around 103,000 employees on its rolls as of end-December 2008, hoed to end the year with 106,000 employees.