Bengaluru-based IT major Infosys has suspended guidance on revenues and margins for FY21 due to uncertainty coming out of the COVID-19 pandemic. Infosys CEO Salil Parekh said that while there is no clear view on when a recovery can be expected, the company will provide guidance after visibility improves.
Speaking of employees and hiring, Infosys has said that it has suspended hiring, salary increments and promotions for the year. However, Infosys will honour all commitments made in terms of campus hires and laterals. Campus hires, COO Pravin Rao said that campus hires will take place in a phased manner.
Pravin also said that there will not be any COVID-related layoffs. However, he said that some of the involuntary actions the company has been taking in recent past will continue and these will all be performance-based exits.
The company also added that there will no be any furloughs, however the company is looking at many initiatives to bring cost under control.
“With some impact due to project deferrals and softening of discretionary spends, there will be some margin pressure in the near term. In response to these new contours of projected demand, Infosys will work to optimize its cost structure and operational rigor, while continuing to invest in strengthening its digital capabilities,” the company said in a statement.
These announcements from Infosys came as the company reported its financial earning for the fourth quarter of FY20 and for the whole financial year.
Infosys reported a 6.3% rise in consolidated net profit to Rs 4,335 crore for March 2020 quarter. It posted a net profit of Rs 4,078 crore in the year-ago period as per IFRS accounting norms. The company’s revenue grew 8% to Rs 23,267 crore in Q4FY21 from Rs 21,539 crore in the corresponding period last fiscal.
In terms of sectors impacted, Pravin said that while all sectors saw some impact in some way or the other, retail, travel and hospitality, energy, oil and manufacturing were among the ones impacted badly.
Infosys said it added 84 new clients in Q4 FY20 with the total client count at 1,411. It also saw large deal signings of $9.0 billion for full year FY 20.
Work from home
Infosys said that currently 93% of employees are working from home and these are more on IT side than on BPM side.
With the lockdown being extended and even though IT is among essential services that have been permitted to come to work from April 20, Infosys plans to bring employees back to work only gradually.
In the first phase, once the lockdown ends, Infosys will have 5% of its workforce come to office over 3-4 weeks. In the next 4-8 weeks, it will gradually increase this to 15% and gradually increase that as well.
Salil said that the company was able to move to a remote working model extremely fast and is now looking at how some of these aspects can be part of the company’s medium and long term. However, it will have to be more careful about security aspect with no lapse there, he added.
“Even once we have employees back, we will have very high standards of safety, temperature checks and will maintain social distancing, not just in office but also in commute and common areas. We will also look at having testing facilities in campus subject to availability,” Pravin Rao added.
“Early on, to enable its employees to work from home, Infosys rapidly mobilized laptops and desktops, with access to secure virtual work environments wherever necessary. The company has provided high speed broadband connectivity for remote workers and expanded its own virtual private network bandwidth by 10X. This meant shipping over 35,000 assets to employee residences. Significant and rapid amplification of its technology landscape was undertaken to support robust and secure remote working at global scale. This meant driving 4X increase in backend capacity to support the increase in concurrently connected remote users,” the company said in a statement.