If we were to consider Infosys as a bellwether of the IT industry, then one gets not just the figures of a company but the status of the economy too
Still hiring:u00a0 Infosys has always honoured all the job offers that it has made, says HR director TV Mohandas Pai Pic\vinod kumar T
If we were to consider Infosys as a bellwether of the IT industry, then one gets not just the figures of a company but the status of the economy too
There are various ways in which one can look at the figures that Infosys released this week for the quarter that ended on December 2008. We can commend them for the fact that, even in this slow economy, the company still plans to hire people. We can also praise them for their clean image and the transparent way in which they are telling us how much money they have in which bank.
We could also look at the figures that Infosys has released in order to understand more about the status of the world economy. While this may look a little narrow because we are seeing the world through the eyes of just one companyu2014it has been done before with surprisingly good results. A good example is The Economist's Big Mac index, which is a financial indicator based on a single fast-food item.
It also makes sense because Infosys has clients (read IT users) spread across the globe, and since companies only invest in new projects IT or otherwise based upon future prospects, the readings we make will have some bearing on the economy. Please note that our comments are a reflection on the global economy and NOT on Infosys.
Europe down
The first thing that becomes apparent is that Europe, which accounted for 28.1 per cent of revenues in JAS 2008, fell down marginally to 25.5 per cent, while North America climbed from 61.5 per cent to 64.5 per cent in the same period. One could say, based on these figures, that while the recession has hurt both continents, North American companies are more aggressive on IT projects that cut costs, while Europe has decided to cut costs as far as possible by not pushing IT investments in the current period. This could be also reflected in the fact that worldwide, application development has gone up slightly (20.6 per cent to 20.8 per cent) while business process management has gone down (6.0 per cent to 5.7 per cent).
More worrying worldwide are the manufacturing and telecom sectors, representing as they do the vanguard of the old economy and the raciness of the new economy respectively. While manufacturing has gone down marginally (20.1 per cent to 19.6 per cent), telecom has taken a beating (19.0 per cent to 16.7 per cent).
From an Infosys perspective, this is also a quarter when the total number of active clients came down, albeit marginally, from 586 to 583. While the figure is miniscule in the extreme, this is the first time since March 2007 that Infosys has shown a reduction in the total number of active clients. As of March 31st 2007, Infosys had 500 clients, which closed at 538 on March 31st 2008. This figure actually shot up to 586 as of September 30th 2008, but now, as of December 31st 2008, this has come down.
People management
All this means that there will be HR troubles. True, Infosys has done exceedingly well when compared to other companies they are actually hiring when others are firingu2014but the slowdown has got to them here. While the gross additions of employees as of JAS 2008 were 10,117, for OND 2008 it came down considerably to 5,997.
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Still, it is important to note that the company, which planned to hire around 25,000 employees this year, may actually touch the 27,000 mark. As TV Mohandas Pai, member of the board and director human resources said, Infosys has always honoured all the job offers that it has made.
So, what is the outlook for the economy? S Gopalakrishnan, CEO and MD of Infosys said that this could happen towards the end of 2009 or the beginning of 2010. Let us hope that his words come true sooner rather than later.
QUICK TAKE
>>Infosys' figures may act as a global benchmark
>>The fact that Infosys is still hiring may imply that the economy is not in very bad shape
>>But this time, the number of clients has come down
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