Murthy wants 3 years to rebuild Infosys

He braces employees for tough decision ahead.

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By R. Chandrasekaran

CHENNAI: Infosys executive chairman N.R. Narayana Murthy has said that some tough decisions might be ahead for India’s second biggest software exporter, as it tries to refurbish its sagging brand image.

Addressing the shareholders during the 32nd annual general meeting of the company in Bangalore, Murthy also told them that it will take a minimum of three years to rebuild a “desirable” Infosys. Towards achieving this goal, he said some painful decisions have to be taken.

Murthy’s address came two weeks after he assumed the office of executive chairman, following a request by the company’s board to come back and guide the company, which he co-founded more than three decades ago.

The board made the unusual call after the company’s earnings failed to cheer investors.

On Thursday, prior to the annual meeting, the company had announced that a salary increase of 8 percent for eligible staff for fiscal 2014.

Murthy urged the shareholders to understand, support and encourage in the exciting and rewarding journey during the next three year period. He gave some ideas about the future strategy, which included shifting of focus on opportunities to end-to-end solutions from consulting-led solutions.

He indicated that the company would aim to grab highly competitive, big outsourcing projects that could offer higher yielding revenue such as application development, testing, maintenance, infrastructure management, and business process outsourcing.

In spite of challenges and tough task ahead, Murthy exuded confidence. “We have overcome tougher and bigger challenges before,” he told the investors. “The need of the day is to focus on our employees, take quick, tough and firm decisions, communicate these decisions with clarity and speed, execute these decisions with speed, imagination and excellence and exceed the expectations of our customers and investors.”

This comment gives a clear cut indication of what is store for the employees. It will not be a surprise if the company resorts to manpower reduction based on the performance rather than resorting to a wholesale job cuts across various divisions. The company is also on the look out for a new chief executive officer outside the founders’ list once the current CEO Shibu Lal’s term expires.

Infosys is performing below the level of the Indian software industry and its rivals Tata Consultancy Services and Cognizant Technology Solutions. Both TCS and CTS provided an upbeat outlook for the current fiscal year, unlike Infosys which gave a downbeat forecast.

Murthy gave a clear indication that a magical turnaround is not possible within a short span of time and that the company will soon institute a perform-or-perish dictum.

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