The Economic Times India writes: "The renewed lack of tolerance for poor performance, which will affect up to 5,000 employees, is indicative of the pressure the software company faces to curtail costs while pivoting towards a more aggressive sales strategy."
Apparently this is an about turn for the company that had a policy to help under performers in the past. But Infosys told me that there is actually no change in policy because people come and go based on performance all the time. Perhaps there are more underperformers because the economy is so poor.
An Infosys spokesman said: "Last week, an article in a major daily newspaper claimed that Infosys is laying off 5,000 people to manage costs. This is wrong in two different aspects.
One, there is no layoff. Infosys is a performance-driven company. And like any performance-driven company, it actively manages underperformance and encourages chronic under-performers to seek other jobs. This is done regularly and is not a one-time event. We have a robust performance management system that includes structured appraisals and performance feedback.
Two, the number that may be affected is significantly lower than the 5,000 quoted in the article. For a performance- driven company with more than 150,000 employees this is part of the normal ebb and flow of running a business."
Another sign of the pressure that Infosys is under is the company's decision to stop looking for more government business in India. It has enough in the pipeline to keep it going but wants to target other areas for growth.
If Indian companies are being this cautious it really does demonstrate how tough the economy is. HP recently said it will cut underperforming units never mind people.