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Infosys to eliminate roles to flatten organisation

Company will trim its workforce in the ranks of delivery managers, AVPs, VPs and SVPs.

Last Updated: Jun 01, 2020, 11.51 AM IST
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INFOSYS
The effort is to break down a five-tiered structure into two.
(This story originally appeared in on Jun 01, 2020)
BENGALURU: Infosys is undertaking a major restructuring at the higher levels in order to flatten the organisation and make decision-making faster.

As part of this, the company will trim its workforce at job level (JL) 7 and above, those in the ranks of delivery managers, industry principal (the JL7 equivalent for consulting roles), AVPs, VPs and SVPs.

Infosys has over 30,000 employees in senior roles or what they call JL 6, 7 and 8. Around 13,000 employees are in JL7 levels and above. The plan is to reduce, in a staggered manner, 10%-15% of the people at JL7 and above, which would impact over 1,300 executives.

The effort is to break down a five-tiered structure into two. Infosys CEO Salil Parekh is said to have reviewed each layer closely to understand the overlaps in these layers. The idea is to fix greater responsibility and accountability on senior executives who are not billable resources, but are people managers. The initiative includes sales, delivery, BPO and support services, sources said.

In the existing reporting structure in a vertical, delivery managers report to senior delivery managers who then report to a delivery head. The delivery head, in turn, reports into a service offering head and he/she reports to a business unit head. “We don’t want to handle too many handlers,” said one senior executive, who didn’t want to be named. The objective is faster decision-making and to give frontline leaders more flexibility. It will also reduce cost significantly since the salaries for a delivery manager or an industry principal is an average of Rs 35-Rs 40 lakh. VPs and SVPs receive much more.

When TOI asked the company about it, a spokesperson said, “We have no plans or targets for workforce reduction. Nor do we have any predefined percentage of exits as a result of our half-yearly and yearly performance cycles. However, as a performance-driven organisation, some involuntary attrition is integral to the normal course of business every year at Infosys.”

Infosys came close to implementing a similar structure under former CEO Vishal Sikka. A pilot project to identify overlapping/top-heavy roles was initiated in the manufacturing unit under its former head Sudip Singh. It was part of Sikka's Zero Distance programme, which was designed partly to empower a project manager. The project manager would be supported by functions like HR, legal and finance, and would collaborate with the sales team for client requirements. Sikka's sudden exit meant the plan wasn't implemented. But it seems to have made a comeback under his successor.

Moshe Katri, managing director of equity research at Wedbush Securities, said senior level layoffs "are likely a function of ongoing efforts to flatten the pyramid structure at Infosys, aiming at encouraging communications among all levels of personnel as well as eliminating redundancies.”

James Friedman of Susquehanna Financial Group (SFG) said this is part of the “reskilling” underway at Infosys and throughout the industry. “So much of the company’s heritage was from operational excellence of the extreme offshoring of maintenance and infrastructure. But today's architecture really emphasizes innovation and ideation, and those may require some reassessment at the front end of the organization.”
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